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.