Daily Market Update – January 13, 2015 (Close)
This morning was getting off to the same kind of start that yesterday did.
That’s not necessarily a good thing.
Yesterday the pre-open futures got off to a triple digit gain and then saw some slight erosion of those advances before the opening bell.
It then only took a few minutes to see those gains all lost and we ended up the day with a triple digit loss.
This morning, the early triple digit gain in the futures had also eroded just a bit, but hopefully the similarity would end there, was my thought as sipping coffee.
Yesterday, the culprit was said to be oil prices, which continued their decline.
This morning that decline goes even further as OPEC has reiterated its decision to not curtail production.
The difference between yesterday and today’s early trading may be the good earnings news that Alcoa provided after the closing bell.
There’s going to be lots more news coming this week, predominated by bank earnings.
While the economy needs good earnings from its banks, they don’t necessarily tell the story of how the other sectors will perform. There have been a number of quarters over the past few years where the banks have done very well, while everyone else fell behind. Had it not been for the impact of unprecedented buy backs over these past few years and the continuing reliance on the “EPS” metric, some of those quarters would have been abysmal.
Another factor that can potential propel today’s market is the morning’s JOLT Survey.
A few months ago we were all told by Janet Yellen to pay more attention to this report, which indicates the willingness of people to give up the security of their jobs in the expectation that they can find something even better.
That’s an optimistic thing if that’s what’s indicated by the report, but ever since Janet Yellen told us to pay attention to it, we’ve only done so right after she told us, having ignored its data for the past two months.
Regardless of what would be in this month’s report, even if spectacular, its impact will disappear by the time the next economic report is delivered.
Instead, the earnings reports may offer something every day for the next couple of weeks to move us forward.
Still, I didn’t think that there will be much opportunity to do trading today, but would have gladly accepted any if it came my way. While I always want to open new weekly positions and was disappointed that I couldn’t get some of those trades done yesterday, there’s usually something more satisfying about being able to generate the income with what you already have in hand.
My hope was that satisfaction wouldn’t be in short supply, but it was.
What wasn’t expected was that a 250+ point gain would degenerate into about a 140 point loss at its lowest point, representing one of the largest reversals we’ve seen in a while, although lately those reversals have been more frequent.
Yesterday’s decline moved some of those opportunities to get rollovers done and new call sales executed further away, but that was exactly the situation last week, as well and that turned out nicely.
After today’s really negative action, even though the net result is now just like last week, the reversal is in the wrong direction if you’re a bull.
Last week the first two days of the week were really, really bad, but then a reversal came and the middle of the week was a completely different story.
Nothing would be more welcome right now than a repeat of the middle part of last week and seeing a couple of strong days in succession and providing the opportunity to get those rollovers and call sales done, even if no new positions are open.
With volatility a little bit higher, there may be reason to look at some expanded option opportunities, but now earnings also have to be kept in mind.
It’s just too bad that today wasn’t the start of those successive days moving higher, but we still have the possibility of stringing three of those together to end the week and it’s no less bleak than it was this time last week.