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

 

Yesterday’s sell off was really unexpected, but if you filtered out the really large drops in Wal-Mart and Boeing, both DJIA components, all of a sudden it wasn’t quite that large.

Those two accounted for more than half of yesterday’s loss in that index, which was down 0.8%, while the S&P 500 was only down by 0.5%.

That’s still a sizeable drop, but it was really greased by the rapid plunge in Wal-Mart, which took a nearly 10% plunge in a heart beat, about 64 minutes into trading.

This morning it looks as if we’re back to the pattern that was in effect prior to the run higher over the previous 10 days.

That pattern had large declines one day being very often offset in part the following day by some kind of tepid recovery.

The net result of that pattern was to take the market lower and lower.

While I’d like to see the market strengthen, the way it had moved higher over these two previous weeks isn’t really the historical way that the markets have built strength.

For the rest of this week and for next week, which is the start of the November 2015 option cycle, there continues to be relatively little news.

While we await the FOMC meeting the following week most of our attention will be focused on earnings which really started in force earlier this week and continued this morning with some big names reporting.

With some mixed results coming from the major financials there hasn’t been too much reason for the market to make a strong statement in one direction or another as the financial sector results so far seem to be very much company specific and without any over-riding themes.

For the rest of the week I don’t think that I’ll surprise myself again and open another new position as was the case yesterday. Increasingly, as this market goes back and forward, I find myself doing what has often been the easiest and most profitable of all things, which is simply to go back to the well for the same stocks over and over again. As long as those stocks go back and forth around some kind of arbitrary price point it is almost like shooting fish in a barrel.

That accounts for the fact that two of this week’s purchases weren’t on the prospective weekly list and that’s been the case over the past few weeks, as well.

There’s no doubt that doing things that way is more boring, but it’s the kind of boring that I can easily live with and would much rather deal with than the excitement of new discovery.

Hopefully this week will again end with a good combination of rollovers and assignments and leave us in good shape to begin populating the November weekly cycle with positions.