Daily Market Update – September 23, 2014 (Close)

 

  

 

Daily Market Update – September 23, 2014 (Close)

Yesterday was just a really awful day.

It was another in a series of days that characterized last week’s 1.3% increase in the S&P 500 that on the surface seemed great but that actually along with the other major indices lagged the DJIA by quite a bit.

Last week the market was good, just not as good as you would have thought.

Yesterday was another day of lagging the Dow, but this time you couldn’t console yourself with the 1.3% gains, as the Dow itself was down triple digits and on a relative basis everything else was down even more.

Even Alibaba was down about 5%.

For those that boldly stated that the Alibaba IPO marked the beginning of the end yesterday’s trading is validation of their position.

There was a graphic making the rounds yesterday that showed market levels at the time of three previous “largest” IPOs that showed that they occurred at precisely the market’s top of the then current bull markets.

Unfortunately, they didn’t bother telling people that they cherry picked the data and omitted including other “largest” ever IPOs, such as for General Motors (the second time around), Facebook and others. They also conveniently overlooked IPOs on foreign markets that nonetheless traded in the U.S. as ADRs.

Having included any of those other IPOs would have made their graphic appear very different and would have invalidated their contention. In fact, this is what the more reflective graphic would have looked like and that’s whithout adjusting for such factors as Visa having sold about 80% of its shares at IPO, as opposed to Facebook, which only sold 25%.

 

Still, whenever you’re at market highs you do have to wonder whether you’re at the peak.

For those that remember the Reagan Administration, you may remember the one time director of the Office of Management and Budget. That was David Stockman, the architect of the “trickle down theory of economics.”

He just wrote a s
cathing review
of Alibaba that gets a little more frightening if you saw Jack Ma’s “trust me” response to questions regarding the ability of the business going forward, particularly within the context of functioning within China.

This morning things were looking better, but not looking good. Neither for the markets nor for Alibaba.

The market was again poised for a lower open and Alibaba was indicating another 2% lower on a morning that comes after Treasury has announced new regulations regarding tax inversions and the United States and its coalition allies have attacked ISIS targets inside of Syria.

Both of those represent the “unexpected” kind of news, even though most of us knew that each one would likely be coming sooner or later. It’s just that no one really thought that today would be that day.

With surprisingly more new purchases yesterday than I would have believed to have occurred, today was a day to largely be passive and hope that the events of yesterday’s market are not a prelude to a near term sell-off. At the very least today’s nearly triple point drop in the DJIA was worse than the S&P 500 performed, as today everyone was buzzing about another signal, the death cross,” that also has no validation, yet seems to have a significant following.

It’s already clear that Treasury’s decision is having an impact on some proposed inversions, as the new regulations take place immediately. However, what is not being discussed and what is very likely going to be an outgrowth of the Treasury decision is some upcoming modification to the corporate tax code, particularly regarding overseas funds and the tax rates, that would make the desire to execute an inversion less desirable in the first place.

But as far as today is concerned that possibility is irrelevant and won’t be guiding anyone’s investment decisions, much less acting as a catalyst pushing the market forward.

While there remains little that can be identified as a catalyst to help convincingly reach new record highs and do so in a broad fashion, I wouldn’t entirely dismiss the market’s resilience. Just as there is no easily discernable catalyst, there really is no compelling reason to believe that the rug is about to be pulled out as the market isn’t really trading at an historically high multiple, particularly when realizing how that multiple has been artificially elevated through massive stock buybacks.

So pessimism may reign after yesterday and today’s performance, but the signs, other than a gut feeling and a overtly biased graph, just aren’t really there.

 

Click here for reuse options!
Copyright 2014 TheAcsMan

Daily Market Update – September 23, 2014

 

  

 

Daily Market Update – September 23, 2014 (9:15 AM)

Yesterday was just a really awful day.

It was another in a series of days that characterized last week’s 1.3% increase in the S&P 500 that on the surface seemed great but that actually along with the other major indices lagged the DJIA by quite a bit.

Last week the market was good, just not as good as you would have thought.

Yesterday was another day of lagging the Dow, but this time you couldn’t console yourself with the 1.3% gains, as the Dow itself was down triple digits and on a relative basis everything else was down even more.

Even Alibaba was down about 5%.

For those that boldly stated that the Alibaba IPO marked the beginning of the end yesterday’s trading is validation of their position.

There was a graphic making the rounds yesterday that showed market levels at the time of three previous “largest” IPOs that showed that they occurred at precisely the market’s top of the then current bull markets.

Unfortunately, they didn’t bother telling people that they cherry picked the data and omitted including other “largest” ever IPOs, such as for General Motors (the second time around), Facebook and others. They also conveniently overlooked IPOs on foreign markets that nonetheless traded in the U.S. as ADRs.

Having included any of those other IPOs would have made their graphic appear very different and would have invalidated their contention.

Still, whenever you’re at market highs you do have to wonder whether you’re at the peak.

For those that remember the Reagan Administration, you may remember the one time director of the Office of Management and Budget. That was David Stockman, the architect of the “trickle down theory of economics.”

He just wrote a scathing review of Alibaba that gets a little more frightening if you saw Jack Ma’s “trust me” response to questions regarding the ability of the business going forward, particularly within the context of functioning within China.

This morning things are looking better, but not looking good. Neither for the markets nor for Alibaba.

The market is again poised for a lower open and Alibaba is indicating another 2% lower on a morning that comes after Treasury has announced new regulations regarding tax inversions and the United States and its coalition allies have attacked ISIS targets inside of Syria.

Both of those represent the “unexpected” kind of news, even though most of us knew that each one would likely be coming sooner or later. It’s just that no one really thought that today would be that day.

With surprisingly more new purchases yesterday than I would have believed to have occurred, today is a day to largely be passive and hope that the events of yesterday’s market are not a prelude to a near term sell-off.

It’s already clear that Treasury’s decision is having an impact on some proposed inversions, as the new regulations take place immediately. However, what is not being discussed and what is very likely going to be an outgrowth of the Treasury decision is some upcoming modification to the corporate tax code, particularly regarding overseas funds and the tax rates, that would make the desire to execute an inversion less desirable in the first place.

But as far as today is concerned that possibility is irrelevant and won’t be guiding anyone’s investment decisions, much less acting as a catalyst pushing the market forward.

While there remains little that can be identified as a catalyst to help convincingly reach new record highs and do so in a broad fashion, I wouldn’t entirely dismiss the market’s resilience. Just as there is no easily discernable catalyst, there really is no compelling reason to believe that the rug is about to be pulled out as the market isn’t really trading at an historically high multiple, particularly when realizing how that multiple has been artificially elevated through massive stock buybacks.

So pessimism may reign after yesterday’s performance and possibly today’s continuance, but the signs, other than a gut feeling and a overtly biased graph, just aren’t really there.

 

Click here for reuse options!
Copyright 2014 TheAcsMan

Daily Market Update – September 22, 2014 (Close)

 

  

 

Daily Market Update – September 22, 2014 (Close)

After last week’s downpouring of anticipated news this week will be a snoozefest by comparison, but as we’ve seen over and over again, there isn’t necessarily a correlation between news and market movements.

Today, unfortunately turned out to be a great example of that little bit of truth.

A quiet week on the newsfront isn’t necessarily something that offers immunity from a market exploding higher or crumbling under its weight. There needn’t be a tangible reason for either of those occurrences, although we always look for the reasons as both a means of predicting and a means of explanation.

Too bad it never really seems to work that way. Even after all of the explanations in hindsight, they just don’t seem to have predictive value the next time around.

Certainly, the impact of news isn’t consistently a lasting one. We tend to forget and move on quickly, but are also subject to so many bits of news, each of which requires consideration, if not also action.

In a week such as last the news events were from such different directions, the FOMC and the Scotland independence referendum, and were so completely unrelated that it was entirely conceivable that their results could have whipsawed markets,

Instead, everything went as planned and their impacts were additive.

That has pretty much been the story of the past two years.

While there have been some disappointments, they’ve been very temporary in impact, while the greatest challenges have been the unpredicted and unpredictable, most often coming from geo-political issues around the world.

This week everything is quiet on the scheduled news front, other than for Friday’s GDP announcement and the world is relatively quiet, insofar as there’s little new expected to assault our humanity.

With markets at their familiar “new high” levels to begin this week, precious metals sinking even further and interest rates still under the  FOMC’s thumb of “considerable time,” it just makes perfect sense that money would stay at work in equity markets.

It’s hard to argue with that logic, but it’s also hard to accept it when there is a realization that such logic is what most everyone in the world is thinking will be the only path to follow.

Together with the performance spreads between the narrow DJIA and the more expansive NASDAQ 100, S&P 500 and Russell 2000, there was already some
reason to be concerned as last week came to its end.

Today that spread continued as the broader markets performed less well than the more high profile DJIA.

The early morning market was already giving tentative signals and as the day progressed there was nothing tentative about the sentiment and tone of the day’s trading.

With enough assignments from last week to fuel some buying this week I didn’t have any great plans to abandon some caution, as I would still have liked to be in a position to increase my cash reserves as this week comes to its end,  rather than spending it down and putting it at risk.

However, as is so often the case, sometimes it’s hard to resist, even when there is continued reason to resist..

As the first week of the October 2014 cycle was set to begin and already having a number of positions set to expire this week, any new positions were initially considered with both weekly and expanded weekly options, in order to continue the process of attempting to develop some diversification in contract expiration dates. However the near term trades looked more appealing after the market began trading on a downward path.

While I would have especially liked to see some opportunities to sell contracts on those positions that just seemed to expensive to rollover last week and gotten those back to work, if you were looking for anything in green today there wasn’t very much to see.

The more of those opportunities the less is the need to create new positions to generate income for the week, so I would have welcomed those opportunities over buying opportunities, but you have to deal with the market you have and not the one you want.

 

 

Click here for reuse options!
Copyright 2014 TheAcsMan

Daily Market Update – September 22, 2014

 

  

 

Daily Market Update – September 22, 2014 (8:00 AM)

After last week’s downpouring of anticipated news this week will be a snoozefest by comparison, but as we’ve seen over and over again, there isn’t necessarily a correlation between news and market movements.

A quiet week on the newsfront isn’t necessarily something that offers immunity from a market exploding higher or crumbling under its weight. There needn’t be a tangible reason for either of those occurrences, although we always look for the reasons as both a means of predicting and a means of explanation.

Too bad it never really seems to work that way. Even after all of the explanations in hindsight, they just don’t seem to have predictive value the next time around.

Certainly, the impact of news isn’t consistently a lasting one. We tend to forget and move on quickly, but are also subject to so many bits of news, each of which requires consideration, if not also action.

In a week such as last the news events were from such different directions, the FOMC and the Scotland independence referendum, and were so completely unrelated that it was entirely conceivable that their results could have whipsawed markets,

Instead, everything went as planned and their impacts were additive.

That has pretty much been the story of the past two years.

While there have been some disappointments, they’ve been very temporary in impact, while the greatest challenges have been the unpredicted and unpredictable, most often coming from geo-political issues around the world.

This week everything is quiet on the scheduled news front, other than for Friday’s GDP announcement and the world is relatively quiet, insofar as there’s little new expected to assault our humanity.

With markets at their familiar “new high” levels to begin this week, precious metals sinking even further and interest rates still under the  FOMC’s thumb of “considerable time,” it just makes perfect sense that money would stay at work in equity markets.

It’s hard to argue with that logic, but it’s also hard to accept it when there is a realization that such logic is what most everyone in the world is thinking will be the only path to follow.

This morning the market looks as if it will get off to a tentative start.

With enough assignments from last week to fuel some buying this week I don’t have any great plans to abandon some caution, as I would still like to increase my cash reserves as this week comes to its end.

As the first week of the October 2014 cycle is set to begin and already having a number of positions set to expire this week, any new positions will be considered with both weekly and expanded weekly options, in order to continue the process of attempting to develop some diversification in contract expiration dates.

I would especially like to see some opportunities to sell contracts on those positions that just seemed to expensive to rollover last week and get those back to work. The more of those opportunities the less is the need to create new positions to generate income for the week, so I would welcome those opportunities over buying opportunities for now.

 

 

 

 

 

 

 

Click here for reuse options!
Copyright 2014 TheAcsMan

Dashboard – September 22 – 26, 2014

 

 

 

 

 

Selections

MONDAY:  Not too much news this week in follow-up to last week’s torrent that did little to alter the landscape. For those calling for an S&P 500 top marked by the Alibaba IPO today begins the countdown that has been nerly two years in the making

TUESDAY:     The market did begin the appeasement of those that believed the appearance of Alibaba would mark the top. This morning there appears to be some continuation as we sit less than 0.7% from the market’s high.

WEDNESDAY:  Two consecutive triple digit losses barely leaves us 1% below the closing highs. Following the familiar pattern it just looks like we’re due for another bimonthly drop in markets. Hopefully, if that’s the case the pattern continues with the obligatory rebound

THURSDAY:    Which market are you going to believe? The one yesterday or the one from earlier in the week? This morning the market itself doesn’t seem to know which way to go. Maybe it just will wait until tomorrow’s GDP

FRIDAY:  This will be one good week to see come to its end, especially as nothing of substance has occured to bring about the four preceding days of triple digit moves.

 



 

                                                                                                                                           

Today's TradesCash-o-Meter

 

 

 





 “SNEAK PEEK AT NEXT WEEK” APPEARS ON FRIDAYS

Sneak PeekPie Chart Distribution

 

 

 

 

 

 

 

Weekly Summary

  

Click here for reuse options!
Copyright 2014 TheAcsMan