Monthly Archives: January 2016

Daily Market Update -January 15, 2016 (7:30 AM)

The Week in Review will be posted by 10 PM and the Weekend Update will be posted by Noon on Sunday.

The following trade outcomes are possible today:

Assignments:  TWTR (puts)

Rollovers:  none

Expirations: BAC, BBY, CSCO, CY, DOW, GM, HFC, INTC, WY

The following were ex-dividend this week:  WY (1/13 $0.135)

The following are ex-dividend next week:  none

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

Daily Market Update -January 14, 2016 (Close)

With people looking for something resembling a capitulation, yesterday wasn’t that day, despite a nearly 400 point loss.

Yesterday deteriorated quickly as oil continued its steep decline. Today, as oil rose, the market did just the opposite, moving sharply higher and also did it quickly

While there’s absolutely no reason to equate any part of that decline yesterday with an economic slowdown in the United States, it hasn’t mattered to investors, who are still struggling to understand this new paradigm,

Everyone has always understood that a portion of the S&P 500 would go lower as the energy sector was being hammered, but the traditional market has always looked at a weaker energy sector as being a big positive for the market, so long as weaker energy wasn’t related to weaker demand.

At least in the US demand isn’t weaker, but while we may still be the #1 economy in the world, our role is a smaller and smaller component of the pie.

Still, looking at worldwide economies and worldwide stock markets, historically, the US stock market would have been a place of refuge for overseas money at times like this and would have supported our own markets, even in the face of broader weakness.

None of those things is happening and 2016 just keeps getting worse and worse.

This morning’s futures weren’t showing any respite, but the first important S&P 500 company, JP Morgan reported earnings this morning and could be a key to giving investors a reason to consider buying, instead of what they’ve been doing all through the early days of 2016.

The financial sector, along with everything else took it on the chin yesterday, performing even worse than the S&P 500, which was down 2.5%.

JP Morgan’s earnings report this morning was a significant beat on the top and bottom lines, so there was some hope, but the broader market doesn’t necessarily follow the financial sector higher, although it does often follow it lower during earnings season.

Instead, it was all about oil and it didn’t hurt that Shanghai was nicely higher, too.

It’s hard to know whether traders are now going to be even more nervous as earnings are released, especially since the expectations have already been low, or whether they may see some value.

Much of that may depend on what the companies themselves see as their future, as they will start providing guidance.

It’s hard, though, to imagine any company giving anything resembling optimistic guidance, if only to protect themselves from even more disappointment when the April earnings season is getting ready to begin.

Seeing some of the losses being sustained by some of the most prominent hedge funds is an indication of just how unexpected some of the recent moves have been.

Whether its Bill Ackman or Carl Icahn, there have been some really high profile examples of mi-reading both the market and individual stocks, just like most everyone else.

In a small way, that’s encouraging, if only to think that a downward market is an equal opportunity offender and that the biggest of investors don’t always have the kind of advantage, that many think they unfairly possess.

I don’t really care about those things. I just want to have a chance to generate some income from my holdings and that is getting more difficult.

At some point, however, the volatility may start making it more reasonable to start again thinking about making some of those “DOH” call sales by using “Deep in the Hole” strike prices in an effort to start amassing some premium an
d chipping away at those mounting paper losses.

Daily Market Update -January 14, 2016 (7:30 AM)

With people looking for something resembling a capitulation, yesterday wasn’t that day, despite a nearly 400 point loss.

Yesterday deteriorated quickly as oil continued its steep decline.

While there’s absolutely no reason to equate any part of that decline with an economic slowdown in the United States, it hasn’t mattered to investors, who are still struggling to understand this new paradigm,

Everyone has always understood that a portion of the S&P 500 would go lower as the energy sector was being hammered, but the traditional market has always looked at a weaker energy sector as being a big positive for the market, so long as weaker energy wasn’t related to weaker demand.

At least in the US demand isn’t weaker, but while we may still be the #1 economy in the world, our role is a smaller and smaller component of the pie.

Still, looking at worldwide economies and worldwide stock markets, historically, the US stock market would have been a place of refuge for overseas money at times like this and would have supported our own markets, even in the face of broader weakness.

None of those things is happening and 2016 just keeps getting worse and worse.

This morning’s futures aren’t showing any respite, but the first important S&P 500 company, JP Morgan reported earnings this morning and could be a key to giving investors a reason to consider buying, instead of what they’ve been doing all through the early days of 2016.

The financial sector, along with everything else took it on the chin yesterday, performing even worse than the S&P 500, which was down 2.5%.

JP Morgan’s earnings report this morning was a significant beat on the top and bottom lines, so there’s some hope, but the broader market doesn’t necessarily follow the financial sector higher, although it does often follow it lower during earnings season.

It’s hard to know whether traders are now going to be even more nervous as earnings are released, especially since the expectations have already been low, or whether they may see some value.

Much of that may depend on what the companies themselves see as their future, as they will start providing guidance.

It’s hard, though, to imagine any company giving anything resembling optimistic guidance, if only to protect themselves from even more disappointment when the April earnings season is getting ready to begin.

Seeing some of the losses being sustained by some of the most prominent hedge funds is an indication of just how unexpected some of the recent moves have been.

Whether its Bill Ackman or Carl Icahn, there have been some really high profile examples of mi-reading both the market and individual stocks, just like most everyone else.

In a small way, that’s encouraging, if only to think that a downward market is an equal opportunity offender and that the biggest of investors don’t always have the kind of advantage, that many think they unfairly possess.

I don’t really care about those things. I just want to have a chance to generate some income from my holdings and that is getting more difficult.

At some point, however, the volatility may start making it more reasonable to start again thinking about making some of those “DOH” call sales by using “Deep in the Hole” strike prices in an effort to start amassing some premium and chipping away at those mounting paper losses.

Daily Market Update – January 13, 2016 (Close)

Yesterday looked like it might have ended up being just another in a series of disappointments that have so far characterized 2016.

The futures started strongly, then weakened, but then rebounded and the trading session got off to a strong start only to reverse course to a fairly large loss by the late morning,

The surprise is that with about 2 hours left to go in the trading session, the market turned around again.

It did so in a nice fashion, too.

While that happened twice last week, what didn’t happen was seeing any follow through on the following day and the week ended up with about a 6% loss to start the week.

Today, the early futures were actually showing a small gain.

It’s wasn’t much, but it was better than the alternative that we’ve come to know so far this year.

With some potential for nervousness over Iran’s capture of 2 small US Navy vessels and 10 US sailors yesterday, just days before about $100 Billion of their assets are unfrozen, there was certainly lots of potential for this morning to reflect lots of unease about what was going on in that part of the world.

Considering how 2016 has so far been almost exclusively shaped by international events, it definitely would not have been surprising to have seen fear and uncertainty showing up in the futures market this morning.

So far?

Nothing.

With 3 days left to the week, i couldn’t really envision buying anything else. My aspiration was to simply see some opportunity to generate some cash by being able to roll over anything from the list expiring this week.

There are plenty of positions set to expire, but not necessarily plenty of opportunities.

Those opportunities became even fewer today after a real plunge that took the market nearly 400 points lower and closing right near its lows.

With those opportunities likely vanished there was the tiniest bit of solace by having been able to sell some calls on an uncovered position, but that was too little to make up for what we witnessed today.

Maybe there’s some hope of a turnaround surprise coming from earnings as those releases are going to start to speed up over the next 2 weeks.

It wouldn’t take too much of a positive surprise to send markets up sharply, considering that no one is expecting anything good to happen over the next few weeks, but the hole is getting bigger and bigger.

I rarely give up hope and have to think that our current levels a lot of disappointment is already factored into those prices we’re seeing and that only further international uncertainty is going to really depress prices any further in a meaningful way.

As with lots of cycles, the ability to hold your breath really helps.

Daily Market Update -January 13, 2016 (7:30 AM)

Yesterday looked like it might have ended up being just another in a series of disappointments that have so far characterized 2016.

The futures started strongly, then weakened, but then rebounded and the trading session got off to a strong start only to reverse course to a fairly large loss by the late morning,

The surprise is that with about 2 hours left to go in the trading session, the market turned around again.

It did so in a nice fashion, too.

While that happened twice last week, what didn’t happen was seeing any follow through on the following day and the week ended up with about a 6% loss to start the week.

Today, the early futures are actually showing a small gain.

It’s not much, but it’s better than the alternative that we’ve come to know so far this year.

With some potential for nervousness over Iran’s cature of 2 small US Navy vessels and 10 US sailors yesterday, just days before about $100 Billion of their assets are unfrozen, there was certainly lots of potential for this morning to reflect lots of unease about what was going on in that part of the world.

Considering how 2016 has so far been almost exclusively shaped by international events, it definitely would not have been surprising to have seen fear and uncertainty showing up in the futures market this morning.

So far?

Nothing.

With 3 days left to the week, i can’t really envision buying anything else. My aspiration is to simply see some opportunity to generate some cash by being able to roll over anything from the list expiring this week.

There are plenty of positions set to expire, but not necessarily plenty of opportunities.

Hopefully, if those opportunities don’t come, there will at least be some surprise from earnings as those releases are going to start to speed up over the next 2 weeks.

It wouldn’t take too much of a positive surprise to send markets up sharply, considering that no one is expecting anything good to happen over the next few weeks.

I rarely give up hope and have to think that our current levels a lot of disappointment is already factored into those prices we’re seeing and that only further international uncertainty is going to really depress prices any further in a meaningful way.

As with lots of cycles, the ability to hold your breath really helps.