Daily Market Update – August 7, 2014 (8:30 AM)
Following yesterday’s flat trading and flat finish, the morning was awaiting word regarding the ECB’s refinance rate.
With that remaining unchanged, which came as no surprise, the market just continued along the same flat line as it then awaited some word from the ECB president.
In the past he has had a way of moving markets, exactly the same way that the Chairman of the Federal Reserve can move markets, so while the futures were continuing to go no where special after the rate announcement, they could easily have quickly changed direction about 30 minutes later as Draghi began to speak.
The difference has been that when Draghi has spoken his words have largely been the kind that have reassured and rallied markets.
Even though we’re not even down 4% from the S&P 500’s high levels, we could use some of that kind of rally, especially heading into the close of the week when it would especially nice to see some likely assignments.
Unlike the past few weeks in which trading started fairly slowly and then picked up steam in the final two days resulting in a nice combination of rollovers, new covers and assignments, I just don’t see a repeat of that pattern this week.
While flat and down markets are still my favorite environment, it’s a lot better when the rollovers and new covered positions can be established. Even if the stocks are going no where themselves, at least their derivative cousins can do something of value.
So far, this week?
Not so much.
Although there aren’t too many positions set to expire this week, as compared to some recent weeks past, there is still at least some opportunity to see some assigned and some rolled over, as long as the last two days don’t really do anything terribly stupid.
While the past few weeks were able to withstand some week trading days to end the weeks and still see those revenue producing trades accomplished, this week doesn’t have very much of a cushion, so it would be nice to see just a quiet end to a week of headless wandering and then have the chance to start anew next week.
However, despite that apparently sounding negativity, and certainly without wanting to jinx anything, as the market does trade in a flat manner or even trading downward, the portfolio path is again trending toward out-performance as compared to the S&P 500.
That’s not unusual as the premiums are typically the factor that provides the additional performance,
However, while out-performance is always the goal, it’s nice to also couple that with actual increasing portfolio value, as well.
Hopefully those will both continue for the next two days although some opportunity to make the trades would really help and make hope unnecessary.