Daily Market Update – September 30, 2015 (Close)
It’s not really clear what accounted for the morning’s futures pointing to an almost 200 point gain.
It could be that Asia was strong overnight, but that has been a very inconsistent indicator for about the last month. While the early part of our market’s decline definitely followed that in Asia, the uncertainty there has seemingly now been factored into our own thinking and largely discounted at this point, although you just never know what may come next from that part of the world, for better or worse.
Whatever it is that created this morning’s early rise, it wasn’t based upon any news, so it’s likely that it’s just more of the same going back and forth that we’ve seen ever since that breakdown between our markets an China, in particular. Since the, which includes the plunge that took us to our first 10% correction in years, there has been a continuing series of waves taking us up and down and in large moves.
Most of those moves have offset one another, although the net result has still had a negative bias and following Monday’s 300+ point decline everyone was running back to their charts to see where the next levels of support happened to be, just in case the next shoe were to drop.
Yesterday was the kind of day that today, by all rights should have been. There’s really not any news to account for any kind of large move, but of course, that didn’t stop Monday from happening and it didn’t stop today from happening either.
With the Employment Situation Report looming on Friday and the prospects that it may offer another in a lengthening series of strong results, comes the idea that maybe the FOMC will finally raise rates. That could have accounted for some of the early enthusiasm this morning just as it likely accounted for the early week strength that was quickly reversed two weeks ago when the FOMC disappointed most everyone by not announcing what had been widely expected.
With both Janet Yellen and Stanley Fischer scheduled to speak this week there may be some hints of what’s to come, but because the FOMC hasn’t been exactly straight forward, those hints will have to be very heavy handed if the market is going to take the bait.
With a couple of recent familiar faces having been this week’s new purchase positions, I was more than happy to see this morning’s strength and hoped that there’s still going to be some more continuation of it, or at least that the market settles in at around these levels as the week will come to its end.
If so, there could at least be some chance to see some assignments or some rollovers.
If so, especially if there are assignments of those same familiar faces, I wouldn’t mind the continuing opportunity to consider purchasing them again and again, which is the definite advantage of having a market of stocks that is really undecided about where it wants to go. As long as the volatility can remain at these or higher levels, there can be lots of advantage in not thinking too creatively, but rather just doing the same thing, and with the very same stocks, over and over again.
At least today did bring some opportunity to sell some calls on a couple of uncovered positions utilizing some longer term options in the hope that time will bring some more recovery. But if not, or if insufficient, at least some more premiums and dividends are collected along the way to add up and make the waiting period a little bit easier.
With just 2 days remaining for this week, it is like a number of recent previous weeks. There’s no telling where we go from here as the indications are all over the place and still do nothing to instill confidence.
In just 2 weeks earnings start anew and I’m fairly optimistic about earnings this coming quarter, just as I was the last time around.
Hopefully, though, this time around it will work out as planned and won’t be a series of earnings disappointments that coincided with the beginnings of China’s meltdown.