Monthly Archives: September 2015

Daily Market Update – September 24,  2015  (Close)

Other than Monday’s minor blip higher, there hasn’t been much of a reprieve from the disappointment that hit mid-way through Janet Yellen’s press conference last Thursday afternoon.

The implication was that the economy just wasn’t strong enough to warrant an increase in interest rates and investors, who had only very, very recently come to realize that an interest rate increase was a good thing just did what they so frequently do.

They over-reacted and continue to be in hysterical mode.

At least that’s what this morning’s pre-open futures were indicating.

Even as China closed their trading day with some strength and even as the FOMC indicated that they were now keeping an eye of global events, the outlook by investors remains pessimistic.

That could change tomorrow as the GDP is released.

A strong number could do wonders toward changing the mood on the trading floor, as even the slightest move lower this morning would take the S&P 500 back into correction territory, from which it had been emerging and then relapsing for nearly the past month.

Today’s move was less than just “slight,” but was much better than it had been during its depths.

Otherwise, there’s lots of economic data between today and the next FOMC Statement release which comes at the every end of October. Besides the basic economic news there will have been nearly 3 weeks of earnings reports as the next earnings season begins in just a few weeks, as well.

Conceivably there could be enough news supporting the idea that our economy could support that interest rate increase and there’s no doubt that the FOMC members took note of how the market expressed itself as finally being ready for that increase.

The wild card may end up being what will be happening in the global picture, particularly in China. Lots can happen in the month until the next FOMC meeting and that’s now part of the equation, or so it seems.

This morning looked as if it would be one to sit and watch and just hope that the new positions opened and expiring this week don’t get dragged down along with the rest of the market and get taken too far along. It would be great to see those new positions get assigned tomorrow, but the environment has become very challenging and there’s really not to much reason for it.

The US economy and the US stock market remain the best in the world and this should be where money flows as the rest of the world demonstrates itself to be a less reliable place to park money.

While I had been waiting, as had so many, for a correction for a long time, it feels as if the next phase can and should only be higher despite what may be occurring in the rest of the world.

This week I put my money where my mouth is and hope that it wasn’t a mistake to have spoken up.

As has been the only hope that has worked out lately, there’s always tomorrow.

Daily Market Update – September 24,  2015  (8:00 AM)

Other than Monday’s minor blip higher, there hasn’t been much of a reprieve from the disappointment that hit mid-way through Janet Yellen’s press conference last Thursday afternoon.

The implication was that the economy just wasn’t strong enough to warrant an increase in interest rates and investors, who had only very, very recently come to realize that an interest rate increase was a good thing just did what they so frequently do.

They over-reacted and continue to be in hysterical mode.

At least that’s what this morning’s pre-open futures are indicating.

Even as China closed their trading day with some strength and even as the FOMC indicated that they were now keeping an eye of global events, the outlook by investors remains pessimistic.

That could change tomorrow as the GDP is released.

A strong number could do wonders toward changing the mood on the trading floor , as even the slightest move lower this morning would take the S&P 500 back into correction territory, from which it had been emerging and then relapsing for nearly the past month.

Otherwise, there’s lots of economic data between today and the next FOMC Statement release which comes at the every end of October. Besides the basic economic news there will have been nearly 3 weeks of earnings reports as the next earnings season begins in just a few weeks, as well.

Conceivably there could be enough news supporting the idea that our economy could support that interest rate increase and there’s no doubt that the FOMC members took note of how the market expressed itself as finally being ready for that increase.

The wild card may end up being what will be happening in the global picture, particularly in China. Lots can happen in the month until the next FOMC meeting and that’s now part of the equation, or so it seems.

This morning looks as if it will be one to sit and watch and just hope that the new positions opened and expiring this week don’t get dragged down along with the rest of the market and get taken too far along. It would be great to see those new positions get assigned tomorrow, but the environment has become very challenging and there’s really not to much reason for it.

The US economy and the US stock market remain the best in the world and this should be where money flows as the rest of the world demonstrates itself to be a less reliable place to park money.

While I had been waiting, as had so many, for a correction for a long time, it feels as if the next phase can and should only be higher despite what may be occurring in the rest of the world.

This week I put my money where my mouth is and hope that it wasn’t a mistake to have spoken up.

Daily Market Update – September 23,  2015  (Close)

Yesterday, despite the market coming well off of its lows, was still enough of a down day to make Monday’s bounce higher no more than merely a blip.

Following Thursday afternoon’s steep reversal and then Friday’s additional loss after the disappointment of no interest rate increase, analysts were looking everywhere they could to try and explain yesterday’s market action.

I think it was pretty simple and much like the lingering disappointment that may exist when something you wanted very badly failed to materialize.

In a very non-diagnostic kind of way, that feeling is called “the blues” and it’s hard to get into gear.

I think that’s all that the market is suffering from and it isn’t really responding to anything  other than being held hostage by that disappointment that things aren’t as good as they needed to be.

Just imagine being told that you weren’t good enough, whether personally or professionally. That’s what the market faced as it was told by the FOMC that the economy wasn’t good enough to warrant that rate increase, even if you had deluded yourself into believing that it was.

That has to make the market wonder, just as people might wonder, whether everything they had believed was a lie.

Did the market deserve to be at such high levels if the economy wasn’t as good as we thought?

So it’s all understandable.

This morning’s futures were flat and again showed no sign of following Shanghai, which was down sharply, even as its President Xi is trying to convince business leaders in the US that there’s no reason for concern about anything in China nor in the way China does business internally nor with its international partners.

Those business leaders are likely to have left last night’s meeting somewhat circumspect as they wondered whether the US-China relationship might undergo some sort of a re-set.

At this point separating from China’s markets and from its economy may be a very good thing as they are forced to speed up their evolutionary process and figure out how to re-balance personal freedoms with personal wealth as the latter may be dwindling.

While the futures were flat this morning that disappointment in the FOMC’s decision isn’t likely over, but Friday’s upcoming GDP data release could become the springing off point for another jump higher.

Unlike previous months when a disappointing GDP was met with a happy stock market, because it signaled the continuation of low interest rates, this time around every one wants to see better than expected GDP numbers. The hope is that there will be enough data coming in to prompt the FOMC to increase rates.

With earnings season ready to start in less than 3 weeks the real catalyst would be some evidence of earnings growth, especially if there’s also evidence of revenue growth.

That has been an elusive combination for a while and would really be embraced if the case could be made as those earnings start coming in that sales are increasing and profits are rising.

Until then, we should probably be prepared for more bouncing back and forth between being in correction territory and having escaped correction as markets create a foundation that will either end up serving as resistance or support.

It’s anyone’s guess and today the market didn’t even try to think about things, as it was about a listless day as you could find and with almost noting to hang your hopes upon nor to fear.

Daily Market Update – September 23,  2015  (9:00 AM)

Yesterday, despite the market coming well off of its lows, was still enough of a down day to make Monday’s bounce higher no more than merely a blip.

Following Thursday afternoon’s steep reversal and then Friday’s additional loss after the disappointment of no interest rate increase, analysts were looking everywhere they could to try and explain yesterday’s market action.

I think it was pretty simple and much like the lingering disappointment that may exist when something you wanted very badly failed to materialize.

In a very non-diagnostic kind of way, that feeling is called “the blues” and it’s hard to get into gear.

I think that’s all that the market is suffering from and it isn’t really responding to anything  other than being held hostage by that disappointment that things aren’t as good as they needed to be.

Just imagine being told that you weren’t good enough, whether personally or professionally. That’s what the market faced as it was told by the FOMC that the economy wasn’t good enough to warrant that rate increase, even if you had deluded yourself into believing that it was.

That has to make the market wonder, just as people might wonder, whether everything they had believed was a lie.

Did the market deserve to be at such high levels if the economy wasn’t as good as we thought?

So it’s all understandable.

This morning’s futures are flat and again show no sign of following Shanghai, which was down sharply, even as its Premier Xi is trying to convince business leaders in the US that there’s no reason for concern about anything in China nor in the way China does busness internally nor with its international partners.

Those business leaders are likely to have left last night’s meeting somewhat circumspect as they wondered whether the US-China relationship might undergo some sort of a re-set.

At this point separating from China’s markets and from its economy may be a very good thing as they are forced to speed up their evolutionary process and figure out how to re-balance personal freedoms with personal wealth as the latter may be dwindling.

While the futures are flat this morning that disappointment in the FOMC’s decision isn’t likely over, but Friday’s upcoming GDP data release could become the springing off point for another jump higher.

Unlike previous months when a disappointing GDP was met with a happy stock market, because it signaled the continuation of low interest rates, this time around every one wants to see better than expected GDP numbers. The hope is that there will be enough data coming in to prompt the FOMC to increase rates.

With earnings season ready to start in less than 3 weeks the real catalyst would be some evidence of earnings growth, especially if there’s also evidence of revenue growth.

That has been an elusive combination for a while and would really be embraced if the case could be made as those earnings start coming in that sales are increasing and profits are rising.

Until then, we should probably be prepared for more bouncing back and forth between being in correction territory and having escaped correction as markets create a foundation that will either end up serving as resistance or support.

It’s anyone’s guess.

Daily Market Update – September 22,  2015  (Close)

This morning’s sharp decline in the futures was probably an invalidation of yesterday’s decent gain coming after a sharp reversal in fortunes last week.

Yesterday seemed like a day that traders were getting back to their previous behavior that welcomed the delay of any interest rate increase because it extended their handout, which was good for equity trading. They were more than happy to continue receiving that handout rather than seeing the economy show the kind of tangible and sustained improvement that would slow down the flow of those handouts.

That initial reversal of fortune was directly tied to the realization that no one of importance over at the FOMC could sway enough other voting members to vote to finally increase interest rates. That inability was a reflection of the belief that not enough of those people believed that the economy was showing enough building strength to warrant even the tiniest of taps on the brakes

More importantly, as the FOMC has indicated that it wants to finally push through a rate increase and that it has indicated that it would do so ahead of the curve, that seems to send a message that the kind of improvement in the economy to warrant a rate increase isn’t necessarily right around the corner.

Too bad that had to happen just at the same time that the market came to the realization that a rate increase wouldn’t mark the end of the world and instead had set its hopes up for that rate increase after years of pinning everything on the continuation of the Zero Interest Rate Policy.

Funny how those sort of things seem to happen.

For people who are supposed to understand the economy and investor psychology they certainly don’t do a very good job of it.

It continues to amaze me that there would ever be such sharp moves, especially on an alternating basis, as even the most clueless person would know that the basic health of the market and the economy could never change on a dime and then do so again in a back and forth manner. But it also still amazes me that there can be such large moves seen in so many individual stocks, given how many analysts follow so many of those companies and have as much of an informed position as almost anyone else in the world.

Yet, they get it wrong all the time.

So what did this morning’s marked weakness mean?

As I was pondering that question in the morning it meant nothing more than a buying opportunity, as we again were approaching a correction on the S&P 500 if the decline were to hold.

It was and it did.

What may be important this week, maybe more so than usual, will be Friday’s GDP release.

With some discussion that a rate hike may still be on the table in October, perhaps even before the next FOMC meeting, another strong GDP statistic could send an “all’s clear” to investors who now want to see a rate hike and would welcome that strong GDP number.

History shows that September is generally a very weak month and October not much better.

As we approach the end of September it would be nice to see an October that if not moving the market higher, at least continues this volatile kind of back and forth. The trick will be to attempt to capitalize on any strong move higher by finding any opportunity to sell some calls and also finding some of the braveness necessary to buy something on the way down.

I had some of that braveness today and hope that it’s not really more stupidity. If those best and brightest on Wall Street can’t readily tell the difference I’m not going to worry too much about being able to know so myself until all the cards are played.