Monthly Archives: September 2014

Daily Market Update – September 23 2014 (8:15 AM)

If the stakes weren’t so serious this morning’s news from Ukraine would be pretty laughable.

The retraction of a claim that Ukraine had reached a ceasefire agreement with Russia because Russia claims it was never a party to the conflict and because rebel leaders said they were never consulted could never happen in real life, but could be the sort of fork in the road that could take the next step in any direction.

So while awaiting some clarification on what that conflict will mean for us, there is the matter of tomorrow morning’s delayed ADP Report, which comes before Friday’s Employment Situation Report.

Most everyone is expecting another month of 200,000+ job gains and there’s little reason to expect a surprise from either measure of the US economy. The bad news is that because we’re so accustomed to good news on employment bad news would now likely be received very negatively, as no one can reasonably expect the Federal Reserve to back off from its planned end to quantitative easing. Further, really good news would likely also be interpreted as being bad as it could mean an accelerated time table for interest rate increases.

So there’s not much benefit to be gained from the reports and there really hasn’t been much in the way of market reaction through all of 2014, although the Employment Situation Report continues to be strongly associated with both a market advance for the week as well as for the day before the release.

Instead, the real interest will be on tomorrow’s ECB statement and the speculation as to whether they will finally follow the path set by our Federal Reserve and take actions that could add some reason for investment in their own stock markets. However, even in this new inter-connected world, where our greatest companies are now multi-nationals, the shift to a European version of quantitative easing could divert money from our own markets to the new hot markets in Europe.

While any suggestion of quantitative easing in Europe may be made with some initial euphoria, it wouldn’t be too surprising to see a realization that moving in that direction might not be the best thing for our own markets, which have certainly benefited from the flow of money from others around the world.

But that’s an issue for some other day.

Today the market is preparing for a positive open in advance of a quiet day on the news front and after yesterday’s comeback. With a busier day than I initially expected yesterday, I’m not expecting to do very much in the pursuit of more new positions and will just be hoping that the market is able to maintain at these levels, if not higher, to end out the week.

As usual, just as with the Federal Reserve, I have a dual mandate.

I want assignments and I want rollovers. At least yesterday’s surprisingly busy activity opens up the possibility for both this week and with only 4 days in which to act there’s already the need to start thinking about setting up the stage for next week, which is also in need of having it populated with position
s set to expire next Friday.

For today, while I don’t anticipate spending too much  more and definitely don’t want to chase anything down, there’s still some chance of finding an isolated opportunity, ideally one that is also dividend related. Those are fairly sparse this week, but may have some  opportunities next week, including some going ex-dividend on Monday, which can be an easy way to pick up an additional week’s worth of premium for a very short holding period if all goes as hoped.

Well see.

Daily Market Update – September 2, 2014 (Close)

The big story this morning was that the traders are back now that Labor Day has come and gone.

It’s really not as if anyone went away for the summer, it’s just that they had other things to do besides trading all day long. Market volume was abysmally low during the climb higher and the only really elevation in trading activity came during the very brief decline earlier in the summer.

But this week people start coming back and volume should also be increasing, as if they had absolutely no ability to conduct business from the Hamptons.

For a little while today it seemed as if they were coming back with a chip on their shoulders, as the market took a brief turn downward in the absence of any real catalyst.

Fortunately there was nothing on a geo-political front occurring during this past long holiday weekend to really shake things up, because that could have been a messy way to get a shortened week off to a start. As a result the market looked as if it would get off to a really benign start and with very little scheduled news during the week to create expectations for market reactions in either direction. Why the market took a brief turn downward is anyone’s guess, but despite the comeback it was a fairly dour kind of day.

Although there is the monthly Employment Situation Report on Friday and a number of Federal Reserve Governors will be speaking during the week, including the one most recent dissenting voter, there’s not likely to be much in the way of surprise coming from these scheduled events, although there may be some news coming later in the week from the ECB, particularly regarding their version of qualitative easing and how firmly they may be ready to adopt such policies.

Until that point that, again, puts the spotlight on geo-political events and that could also take markets in either direction, although with the NATO meeting this week it’s hard to see how anything could move the markets higher as a result of those events, unless an acquiescent Putin is the end result. However, if the market has any ability to draw upon its recent past, it will realize that the appearance of any kind of acquiescence or agreeability is just a precursor to another bit of disagreeable action.

But what are you going to do? Wait until something happens? That’s actually not a bad idea, except to predicate everything on waiting is probably not a good way to go, but keeping something back for any kind of surprise isn’t necessarily a bad strategy.

Recycling money from assignments is an intermediate approach to dealing with uncertainty. It’s not really committing new money and it doesn’t have to include all of the recently freed up cash, although it easily could and even more.

As usual, when I have funds from assignments looking to be recycled I like to see the market get off to a weak start for the week, but lately that hasn’t been the case, as August had a four week winning streak, with each week getting off to a good start, so I’m not likely to recycle all of it this week.

However, with only a single position set to expire this week that meant that there is littl
e to be rolled over into next week, which itself has a mere three positions set to expire. That further meant I needed to populate this week’s list of income producing stocks and either create the possibility of freeing up cash for next week or at least creating additional income streams from the rollover of any new positions. As a result I found myself looking for new positions with expirations coming this week rather than thinking about the use of expanded options or the monthly. While I would have liked to focus on dividend paying positions, there aren’t too many worthy ones this week that could be of any use.

With the market appearing to get off to a very flat start there wasn’t much reason to aggressively get into the hunt. Instead, as has been the recent pattern, I expected to wait to see if there was any kind of direction to be established. The downside to that waiting, however, was that premiums were already extremely low thanks to the non-existent volatility and are further driven to their depths by having lost one day of time value with the holiday passed.

As far as a constellation of factors goes, those forming this week aren’t very propitious.

The market is at all time highs,  premiums are at all time lows and we are being held hostage by events external to the market in far off lands.

Not my favorite way to get a week off to a start, but somehow it usually works out anyway.

Admittedly, I was surprised by having opened as many new positions as I did. They may represent the totality of this week’s new position activity, but at least it gives some framework for the rest of the week and perhaps next week as well.

After getting off to a reasonable start for the week I would be very happy to see it gain some strength moving toward the week’s end and the Employment Situation Report. Any opportunity to put some cover on existing positions would be a nice way to mix things up a bit while awaiting some clarity regarding what kind of liabilities await us on the various risk fronts, both inside and outside of the market.

Daily Market Update – September 2, 2014 (8:30 AM)

The big story this morning is that the traders are back now that Labor Day has come and gone.

It’s really not as if anyone went away for the summer, it’s just that they had other things to do besides trading all day long. Market volume was abysmally low during the climb higher and the only really elevation in trading activity came during the very brief decline earlier in the summer.

But this week people start coming back and volume should also be increasing, as if they had absolutely no ability to conduct business from the Hamptons.

Fortunately there was nothing on a geo-political front occurring during this past long holiday weekend to shake things up, because that could have been a messy way to get a shortened week off to a start. As a result the market looks as if it will get off to a really benign start and there’s very little scheduled news during the week to create expectations for market reactions in either direction..

Although there is the monthly Employment Situation Report on Friday and a number of Federal Reserve Governors will be speaking during the week, including the one most recent dissenting voter, there’s not likely to be much in the way of surprise coming from these scheduled events.

That, again, puts the spotlight on geo-political events and that could also take markets in either direction, although with the NATO meeting this week it’s hard to see how anything could move the markets higher as a result of those events, unless an acquiescent Putin is the end result. However, if the market has any ability to draw upon its recent past, it will realize that the appearance of any kind of acquiescence or agreeability is just a precursor to another bit of disagreeable action.

But what are you going to do? Wait until something happens? That’s actually not a bad idea, except to predicate everything on waiting is probably not a good way to go, but keeping something back for any kind of surprise isn’t necessarily a bad strategy.

Recycling money from assignments is an intermediate approach to dealing with uncertainty. It’s not really committing new money and it doesn’t have to include all of the recently freed up cash, although it easily could and even more.

As usual, when I have funds from assignments looking to be recycled I like to see the market get off to a weak start for the week, but lately that hasn’t been the case, as August had a four week winning streak, with each week getting off to a good start, so I’m not likely to recycle all of it this week.

However, with only a single position set to expire this week that means that there is little to be rolled over into next week, which itself has a mere three positions set to expire. That means I do need to populate this week’s list of income producing stocks and either create the possibility of freeing up cash for next week or at least creating additional income streams from the rollover of any new positions. As a result I’ll probably be looking for new positions with expirations coming this week rather than thinking about the use of expanded options or the monthly. While I would have liked to focus on dividend paying positions, there aren’t too many worthy ones this week that could be of any use.

With the market appearing to get off to a very flat start there’s not much reason to aggressively get into the hunt. Instead, as has been the recent pattern, I’ll wait to see if there is any kind of direction to be established. The downside to waiting, however, is that premiums are already extremely low thanks to the non-existent volatility and are further driven to their depths by having lost one day of time value with the holiday passed.

As far as a constellation of factors goes, those forming this week aren’t very propitious.

The market is at all time highs,  premiums are at all time lows and we are being held hostage by events external to the market in far off lands.

Not my favorite way to get a week off to a start, but somehow it usually works out anyway.