Daily Market Update – January 29, 2015 (Close)

Yesterday was another example of how the pre-opening futures, if they’re not trading with a large move, don’t have much ability to predict what will happen during the real trading session.

Today was another.

Granted that yesterday was an FOMC Statement release day, but lately that too has stopped having much in the way of predictive capability, just as the day before an FOMC has stopped being a profoundly positive day.

For some reason, the market eventually decided that the eventual FOMC Statement was negative and people were talking about how Janet Yellen’s honeymoon was now over.

I’m not certain who they’re referring to, as I don’t know if the stock market has ever had that kind of relationship with a Federal Reserve Chairman, but after a period of not moving very much after yesterday’s release, the market eventually decided something was really rotten and the sell-off really accelerated having taken the DJIA from a nearly 100 point gain at the time of the announcement to a nearly 200 point loss.

That’s volatility and after a brief respite for a day or two, it’s asserting itself again, although still far below fun levels.

While I don’t trade or buy bonds of any kind, it was also hard to not notice how the Treasury market has been reacting lately, as volatility has definitely found its way into there, as well.

While most fears are related to an increase in interest rates and wondering when that would happen, the 10 Year Treasury fell to about 1.72% and the 30 Year hit all time low rate levels.

Considering that many believe that bond traders are the smart ones in the room you would then have to wonder what the stock market is worried about, as history does show that the bond market is pretty good at predicting Federal Reserve  actions and right now they’re not seeing any kind of imminent rate hike.

This morning, maybe helped by some decent earnings from Dow Chemical and others, the market was showing a little bit of a bounce in the pre-market trading, but after the past 2 days of losses, that so far has the S&P 500 down 2.4% for the week, a little bounce isn’t very much, but it turned into much more than that by the time it was all done for the day.

Why it did so is a little bit of a mystery, but as far as mysteries go, it was a good one.

Now, there’s only 1 day to go this week, so I’m still hopeful that there will be some more opportunity to see some assignments. While I was hoping to see all positions set to expire this week, at this point I wouldn’t mind some rollovers as the alternative and looked for any opportunity to do so today, although in general the longer you can wait to do so, the better, as long as the stock price doesn
‘t move too strongly against you.

Again, it’s a telling sign when precious metal stocks are the ones seeing the greatest back and forth moves and accounting for so many of the trades lately. High levels of volatility in precious metals isn’t generally something that should create lots of comfort or security unless you’re over-weighted in those.

Today may have seen some earnings related trading going on as there were some big movers this morning on their news, both good and bad, but it’s probably tomorrow’s GDP that many are waiting for to either confirm or invalidate the belief that the economy will heat up thanks to falling energy prices.

Because of that uncertainty, and so far there hasn’t been too much indication of what seemed to be so obvious, there was some added reason to want to jump the gun and consider rollovers today rather than waiting until tomorrow when those opportunities may end up being more remote, but it was just a good day to see some recovery from the previous two, instead.

Hopefully tomorrow will bring some more of the same.