Monthly Archives: June 2015

Daily Market Update – June 16, 2015  (Close)

Yesterday was another in a series of days to feel negatively about the market.

Although the focus has very recently been on Greece and the back and forth it has been having with both the ECB and the IMF, that focus will shift pretty fast as the FOMC Statement is released tomorrow.

That shift may have already happened as the market erased all of yesterday’s loss and traded just as yesterday did, only in the opposite direction.

Yesterday was a pretty bad day, even as it closed nearly 50% below the day’s lows. At least this morning there was no evidence of any further crumbling ahead of the opening bell. There was also no evidence of the market deciding to get optimistic ahead of tomorrow’s release.

The fact that the market didn’t pile on the losses during the futures session could alone have been seen as a victory of sorts, as there’s been very little reason for optimism lately. The complete reversal once trading started is another victory, at least in kind, if not really meaningful. Those occasional triple digit gains, such as last week, when it looked as if there might be some kind of agreement on the Greek issue, are just blips that have no meaning.

If they do have meaning it would only be if we are still in a bull market. That’s because the types of really large moves higher that we have been seeing the past few months after some large losses, usually only happen after bear markets.

While we’re probably still in that bull market, it’s really hard to know except years after the fact, as certain market moves can be seen as preludes only in hindsight.

With the market now again only 2.5% off from its all time highs the feeling is far more negative than a mere 2.5% should warrant, although some will have a sense of optimism after today’s gains. That’s because over the past few years we have had these kinds of declines on a very regular basis and simply moved higher from there. Today could have been more of the same, just as easily as it could have been a bull day in a long term bear market.

While this may not be any different and while most of the previous declines likely had some of the feeling that the big one was coming, it’s difficult to see where the next bit of optimism is going to come from, even with today’s optimism.

Where it may arise is from the feeling that a burden has finally been lifted once interest rates are finally raised.

There may be some hint of that to come tomorrow and that could result in a relief rally, but the amount of data coming in to support the interest rate increase hasn’t been very overwhelming. We may be seeing the beginning of a trend, but it does seem to be very early in the process to make the jump and pull that trigger.

Still, it would be a good thing for that decision to be finally made.

With yesterday’s weakness in the market and an unwillingness to put additional money on the line, I had a few rollover trades placed, but none could get executed. I was hoping that the very mild decline being seen this morning wouldn’t be too much of a barrier to getting something done this week, but even the strong broad move didn’t help to get any done today. Making some rollover trades ahead of the FOMC Statement release may be a good thing if the response by the market isn’t going to be welcoming, but those opportunities are becoming sparse as the market has been so tentative lately.

With some more possibility of an agreement ahead among Greece, t
he ECB and the IMF, there’s always that chance that markets will be lifted, as I don’t think there’s any further near term downside risk. Most probably expect no resolution and may even be already discounting a Greek exit from the EU.

With no good news having been digested by the markets in a while, any remotely good news may become exaggerated.

If so, I hope that comes before the week’s end and best of all would be additive to any good news we might react to from the FOMC.

I’d like to get out of the June 2015 option cycle and into the July cycle as unscathed as possible and with cash to show for it, but that may be a hard fought battle at the moment.

Daily Market Update – June 15, 2015  (Close)

If the morning’s pre-opening futures were going to be any indication, this week wasn’t going to be getting off to a good start.

With the DJIA down nearly 100 points some 90 minutes before the market’s open, there have been a couple of instances in the past month that such negative pre-openings reversed themselves very quickly as trading opened on the regular session, but that’s not usually the case.

Today wasn’t going to be one of those days.

This morning the pretext for the drop was some more disappointment concerning a Greek default.

Last week the large moves up and down were attributed to polar opposite news on the situation of an agreement between Greece and the ECB and IMF.

This morning the news wasn’t good, just as the last of the news last week wasn’t promising.

Ahead of this week’s FOMC Statement release, which also may weigh heavily on the market, even if only due to some change in wording, the market doesn’t appear to be well equipped to deal with any adversity.

While there’s always a chance that a rabbit will be pulled out of a hat and the Greek financial crisis can continue to be kicked down the road, there’s not too much prospect of good news coming from many quarters for now.

But with all of the negativity surrounding the market, the reality is that it was barely down even 2% from its highs as the morning was set to begin.

That’s still quite a distance from where a mini-correction would take us, which would be about another 2.5% lower after today’s final tally, which, maybe coincidentally, is where technicians would point out there is some support.

Most times I’m not overly anxious to see earnings season descend upon us, but right now that may be the only hope for a near term catalyst to move markets higher. Unfortunately, that’s still about 4 weeks away and until then we’ll have to continue to deal with interest rate hike fears and whatever dysfunction may come to us from Europe.

With so many positions set to expire this week and with very little time to recover from any FOMC induced sell off, I would like to look at any opportunity to better position anything that is due to expire this week. At the moment there is some chance for some assignments, but those opportunities may be fleeting if weakness persists or grows this week.

With just a little bit of cash added to the reserve from the single assignment last week and with a real desire to add to those reserves, I don’t expect to be looking for many, or any, new positions this week. After last week of not having added any new positions I would love to do something, but this may not be the right time to think about committing any new or existing funds, even if you have the money to spare.

Right now, even a new blue chip could be the same as a speculative position, being dragged down by market momentum.

This may be a good time to heed ages old advice and wait until seeing the whites of their eyes to get an idea of where market sentiment is going. For now it seems
to be going lower and it may be up to the FOMC to finally set us free from our fears or let earnings speak for themselves and do what is supposed to happen in an economy that’s getting better and better.

Daily Market Update – June 15, 2015  (8:45 AM)

If the morning’s pre-opening futures are going to be any indication, this week isn’t going to be getting off to a good start.

With the DJIA down nearly 100 points some 90 minutes before the market’s open, there have been a couple of instances in the past month that such negative pre-openings reversed themselves very quickly as trading opened on the regular session, but that’s not usually the case.

This morning the pretext for the drop is some more disappointment concerning a Greek default.

Last week the large moves up and down were attributed to polar opposite news on the situation of an agreement between Greece and the ECB and IMF.

This morning the news isn’t good, just as the last of the news last week wasn’t promising.

Ahead of this week’s FOMC Statement release, which also may weigh heavily on the market, even if only due to some change in wording, the market doesn’t appear to be well equipped to deal with an adversity.

While there’s always a chance that a rabbit will be pulled out of a hat and the Greek financial crisis can continue to be kicked down the road, there’s not too much prospect of good news coming from many quarters for now.

But with all of the negativity surrounding the market, the reality is that it’s barely down even 2% from its highs.

That’s still quite a distance from where a mini-correction would take us, which would be about another 3% lower, which, maybe coincidentally, is where technicians would point out there is some support.

Most times I’m not overly anxious to see earnings season descend upon us, but right now that may be the only hope for a near term catalyst to move markets higher. Unfortunately, that’s still about 4 weeks away and until then we’ll have to continue to deal with interest rate hike fears and whatever dysfunction may come to us from Europe.

With so many positions set to expire this week and with very little time to recover from any FOMC induced sell off, I would like to look at any opportunity to better position anything that is due to expire this week. At the moment there is some chance for some assignments, but those opportunities may be fleeting if weakness persists or grows this week.

With just a little bit of cash added to the reserve from the single assignment last week and with a real desire to add to those reserves, I don’t expect to be looking for many, or any, new positions this week. After last week of not having added any new positions I would love to do something, but this may not be the right time to think about committing any new or existing funds, even if you have the money to spare.

Right now, even a new blue chip could be the same as a speculative position, being dragged down by market momentum.

This may be a good time to heed ages old advice and wait until seeing the whites of their eyes to get an idea of where market sentiment is going. For now it seems to be going lower and it may be up to the FOMC to finally set us free from our fears or let earnings speak for themselves and do what is supposed to happen in an economy that’s getting better and better.