Daily Market Update – September 8, 2014 (Close)

After another week of setting records this week is one that doesn’t really have much in the way of scheduled news events.

In fact, if you didn’t realize it to be otherwise, you would have thought that this was the last week of summer, with no one staying around to do their jobs. In addition to a very, very light week of planned economic reports and releases, there’s only a single Federal Reserve Governor giving prepared remarks for the week, whereas most weeks it’ss about 5 or so.

Lately, however, the market has liked these vacuums and insulation from the world of real economics and data. It has just moved higher and higher, especially when there’s been nothing acting as resistance.

During these periods of quiet there hasn’t been a need to decide whether good news is bad or bad news is good. Instead, no news has been the best news. No thought is necessary when there are no inputs coming and even autopilot looks like a genius.

What it hasn’t liked has been external events, but lately it has turned a deaf ear to what has been going on around the world, not really letting much get in the way of its continued climb higher after a very brief and shallow downturn in July.

After a bit of a buying spree last week and the spending down of cash reserves that saw only 3 positions get assigned, I may be in a more cash preserving mode as this week begins. Unlike last week when the week started with only a single position set to expire that week, this week is much more broadly populated with expiring positions.

The same is true, and even more so, for next week’s monthly expiration.

With volatility continuing at such low levels that means that the likelihood is that for any new positions opened this week the focus will be on weekly expirations, as much as I would like to expand the holdings on the basis of expiration date, but we all know how those plans go, sometimes.

As has been the case for a while I would gladly trade off some new positions for the opportunity to find cover for existing positions and the ability to put those back to work. Not only could that preserve cash it could share in any potential market climb while not adding to the risk that might be associated with any market decline.

Unfortunately, that’s been more of a dream than a reality, but you can’t blame someone for continuing to dream. Today, though, wasn’t the kind of day that was meant to see dreams come true.

With no real direction noted in the pre-open, as has been the case for a while, I was very likely wait to see if there was any prevailing tone being established before committing much in the way of reserves, but some early weakness dictated otherwise and in hindsight, I wish I had not waited at all.

Although I’d especially like to add some technology, healthcare or finance in order to better re-establish some diversification, I wasn’t likely to just wait for one of those specific opportunities to come along, instead using
the “best athlete” model and going for that opportunity, if it appears. So instead, it turned out to be more energy and more consumer sector positions added today.

Hopefully the week will be one of calmness inside and outside of markets, allowing some of the week’s positions to be assigned and replenishing cash, with an eye toward getting ready for the cycle’s end and beyond.

Today was nothing more than a step to get us one day closer to this Friday and the next and with nothing else very memorable or consequential. However, I’m not certain that I will be very inclined to add too much more in the way of new positions unless feeling significant certainty that a fair portion of this week’s expiring positions are likely to be assigned or rolled over.

Unfortunately, today’s market didn’t do much to encourage that feeling of confidence.