Monthly Archives: October 2015

Daily Market Update – October 16,  2015  (8:30 AM)

The Weekend Update will be posted by 6 PM and the Weekend Update will be posted by Noon on Sunday.

The following trade outcomes are possible today:

Assignments:  ABBV, SBGI

Rollovers: ANF

Expirations:  EMC, MRO

The following were ex-dividend this week:  FCX (10/12 $0.05), AAB (10/13 $0.51)

The following will be ex-dividend next week: FAST (10/23 $0.28)

Trades, if any, will be attempted to be made prior to 3:30 PM EDT.

Daily Market Update – October 15,  2015  (Close)

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 looked 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.

But right at noon, something just clicked and the market went on another tear higher. Maybe it was a very minor support level at the 1994 level on the S&P 500, but that’s as good of an explanation as anything else that you can conjure up.

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, yet today showed you don’t need 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.

What was pretty fascinating today was how some of those disappointing earnings reported this morning before the opening bell were really turned around as the day ended. Goldman Sachs, for example did a nearly $10 turnaround, or about 6%

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.

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.

Daily Market Update – October 14,  2015  (Close)

Yesterday was another pretty boring day made even more so by having had my internet and cable connections restored.

The day started with some disappointing earnings by Johnson and Johnson that couldn’t be ignored even after the announcement of a big stock buyback and ended with a less than enthusiastic reception from investors after the market closed when both JP Morgan and Intel reported earnings.

The early response to the Intel earnings may paint a picture of what this new earnings season may be like, as the initial response was actually a very positive one, as the earnings were better than expected. Not too long afterward the selling started and reasonably good news was treated as if it was disappointing.

Of course, just when you think you have it all figured out, Intel turned around beautifully even as the overall market just crumbled away.

Early indications this morning, however, from Bank of America and Wells Fargo were showing their early earning gains as holding up, but their conference calls still awaited and Wells Fargo wilted, while Bank of America at least kept its head above water..

So this morning’s futures were again flat, as that had been the theme for this week, so far, but the market paid no attention to that and went its own not so merry way that just got less and less merry as the day wore on.

With a couple of new purchases for the week and now entering the mid-point, I thought that I was likely done spending money for the week and would instead have loved to have simply had the opportunity to do anything to generate some more income for the week.

Instead, there was more parting of the ways with cash and some more opportunity to generate cash, thanks to some strength in precious metals.

After a few weeks of large moves, this week, was looking as if it was  shaping up as one for everyone to just sit back and take a deep collective breath.

So much for appearances.

From a technician’s point of view a breather would have been a very good thing following a very quick 6% move higher, just as developing a period of stability after a large drop would be considered to be a good thing.

Having these periods of collection is usually a sign that those who are prone to rash trading have been flushed out and more rational minds can prevail, even if their time period for dominance can be measured only in minutes sometimes.

I don’t know where those rational minds went today, because despite Wal-Mart’s glum news, there really wasn’t much reason for the market to follow along.

For now, things do still seem rational, but there really hasn’t been much in the way of news that can elicit a market response. While we will be getting a torrent of earnings coming in over the next two weeks, the real news may just end up being the more macroeconomic stories that can be interpreted as having an influence over the FOMC as they prepare to have their October meeting.

Until then, though, it will be a focus on individual names and at some point there may be an over-riding theme, as there has been for the past couple of quarters. 

That theme has been missing on the top line and beating on the bottom line.

While everyone loves to see profits it doesn’t necessarily paint a very positive picture when comparative revenues are down or less than expected, even as profits may increase, especially when those profits are being reported on a per share basis and the denominator of shares is shrinking.

Or when the profits come as a result of cost savings, such as was the case for Bank of America this morning, which reported a quarter with significantly lower legal costs and
was actually suffering from some of the bigger picture issues that JP Morgan reported.

That over-riding theme hasn’t been the most conducive for the market to continue its move higher, even though for the longest time the market did ignore the illusion of profits.