Monthly Archives: January 2016

MONDAY:   China, Saudi Arabia and Iran. 2016 wasn’t supposed to get off to this kind of a start

TUESDAY:   Asian markets moderated overnight, but US markets look as if they want to give back a big part of yesterday’s late session comeback. Strap on as 2016 continues.

WEDNESDAY:  News that North Korea has an H Bomb, coupled with decreasing iPhone orders added to record cash inflows into mutual funds give the market plenty of reasons to worry. I think the last of those three may be the worst of all.

THURSDAY:  Strap on again. China plummets overnight and taking Europe and US futures along the ride

FRIDAY:. 







 

Daily Market Update -January 6, 2015 (9:00 AM)

While world markets, with the exception of Shanghai overnight, may be distressed over the news that North Korea has likely successfully tested a hydrogen bomb, I don’t think that is really sending the S&P futures so harshly lower, as they also did to open the New Year on Monday.

Sure, the news is worrisome, but then there’s also the news that Apple iPhone orders are dropping and those shares may be poised to dip below $100, adding to the woes of Carl Icahn, who would join other mega hedge fund people, like Bill Ackman in bemoaning their recent fates.

I think, though, that the real kiss of death this morning is that so much money has been reported to have flowed into mutual funds in 2015 and especially the past 2 months.

When people start thinking it’s a good thing to put money into those vehicles, I think that’s a bad sign for what awaits.

The mutual fund investor hasn’t exactly timed things very well for the past couple of generations, so I wouldn’t get too encouraged by money pouring into those accounts.

One possibility, though, is that more money is pouring in, not because of investor confidence, but because maybe more are now at work and able to contribute to 401k plans.

I’ll leave it to someone else to figure out the details.

The morning’s futures were down about another 1.7% with about 30 minutes to go until the bell rings, so there’s not too much reason to think that things are going to suddenly turn around.

On days like this, just as was the case on Monday, sometimes the best you can hope for is that the market doesn’t close the day with selling into weakness. On Monday there was buying going on into the close and that at least offered a glimmer of hope for Tuesday.

Maybe all that we can ask is for a glimmer of hope for tomorrow.

With the constellation of concerning news this morning and this week, in general, there aren’t many good reasons to feel any optimism, although with earnings season soon ready to start, maybe some companies will be able to pull rabbits out of their hats and get us all concentrating on such fundamentals as real earnings.

That would be a nice diversion from the train wrecks going on in the rest of the world.

Daily Market Update -January 5, 2015 (Close)

US markets did reasonably well yesterday, despite a 272 point loss in the DJIA, as everything is relative.

Shanghai and Europe would have probably been happy with only about a 1.5% loss, as the US cut its own loss by about 40% as the session headed toward the close.

This morning we awoke to news that losses definitely moderated in Shanghai, but our own futures looked as if they wanted to give back what little buying there was in the final hour of yesterday’s trading and by noon it looked as if that was really going to be the case.

While there were certainly lots of losers yesterday and they seemed to be better distributed on the first day of trading than was the case through any part of 2015, today the market did what it did yesterday, as well. It was able to erase a decent portion of the day’s losses. So much so that today the market actually finished a very little bit higher.

The basic rules are still murky, though.

Where there initially appeared to be some promise on the heels of a growing Saudi and Iranian conflict, the energy sector started to give up those early gains fairly quickly during yesterday’s session.

One year to the next are often so different when comparing them on the basis of the markets even as very little may change in the world.

If you’ve been holding your breath for energy prices to rebound, yesterday’s inability to do so, even in the face of what could be some really substantive news, has to be just more disappointment.

There have been so many occasions over the past 15 months that energy looked as if it could have been a bargain and you would have been wrong each of those times, unless you were very short term oriented.

Unfortunately, in 2015, that was true of lots of stocks.

Bargains may not have really been bargains and you do have to wonder at what point 2016 will turn that tide.

I took one chance yesterday with what i thought was a bargain.

It was, though, nothing more than trying to re-establish a position that had been held in succession on 4 occasions over a 5 week period in October and December, that simply looked to be back to a fair price.

Not necessarily a bargain price, but a fair one.

That may be the theme for 2016, or at least this early and unsettled part.

I’d like to have the opportunity to re-establish positions in those stocks that I’ve repeatedly owned over the last 3 to 4 months of 2015, when otherwise my opening of new positions had been very sparse.

For 2016, I wouldn’t mind repeatedly re-inventing the wheel and not looking to far a field for what could serve as an income stream.

For today  I didn’t expect to be doing much, other than looking for some opportunities to roll over positions that may expire this or next week, in addition to any of those recurring opportunities in some familiar stocks.

Since my expectations were low, I couldn’t be overly disappointed with the outcome of sitting and watching silently.

Tomorrow will probably be more of the same.

Most of December was spent watching the ticker and not making very many trades.

January may not be very different, but it’s far too early to tell, as there are still plenty of people who hold onto the myth of those January rallies.

You never know what myths can become real, but for now, I wouldn’t mind seeing some strength in energy and a continued irrational coupling of the market in a move higher with energy.

That would at least bring one different thing into 2016 and maybe some of those other a
reas that were hit so hard in 2015 could show some strength at the expense of the handful that thrived in 2015.

Daily Market Update -January 5, 2015 (7:30 AM)

US markets did reasonably well yesterday, despite a 272 point loss in the DJIA, as everything is relative.

Shanghai and Europe would have probably been happy with only about a 1.5% loss, as the US cut its own loss by about 40% as the session headed toward the close.

This morning we awoke to news that losses definitely moderated in Shanghai, but our own futures looked as if they wanted to give back what little buying there was in the final hour of yesterday’s trading.

There were certainly lots of losers yesterday and they seemed to be better distributed on the first day of trading than was the case through any part of 2015.

Where there initially appeared to be some promise on the heels of a growing Saudi and Iranian conflict, the energy sector started to give up those early gains fairly quickly during yesterday’s session.

One year to the next are often so different when comparing them on the basis of the markets even as very little may change in the world.

If you’ve been holding your breath for energy prices to rebound, yesterday’s inability to do so, even in the face of what could be some really substantive news, has to be just more disappointment.

There have been so many occasions over the past 15 months that energy looked as if it could have been a bargain and you would have been wrong each of those times, unless you were very short term oriented.

Unfortunately, in 2015, that was true of lots of stocks.

Bargains may not have really been bargains and you do have to wonder at what point 2016 will turn that tide.

I took one chance yesterday with what i thought was a bargain.

It was, though, nothing more than trying to re-establish a position that had been held in succession on 4 occasions over a 5 week period in October and December, that simply looked to be back to a fair price.

Not necessarily a bargain price, but a fair one.

That may be the theme for 2016, or at least this early and unsettled part.

I’d like to have the opportunity to re-establish positions in those stocks that I’ve repeatedly owned over the last 3 to 4 months of 2015, when otherwise my opening of new positions had been very sparse.

For 2016, I wouldn’t mind repeatedly re-inventing the wheel and not looking to far a field for what could serve as an income stream.

For today  I don’t expect to be doing much, other than looking for some opportunities to roll over positions that may expire this or next week, in addition to any of those recurring opportunities in some familiar stocks.

Otherwise, it will probably be more of the same.

Most of December was spent watching the ticker and not making very many trades.

January may not be very different, but it’s far too early to tell, as there are still plenty of people who hold onto the myth of those January rallies.

You never know what myths can become real, but for now, I wouldn’t mind seeing some strength in energy and a continued irrational coupling of the market in a move higher with energy.

That would at least bring one different thing into 2016 and maybe some of those other areas that were hit so hard in 2015 could show some strength at the expense of the handful that thrived in 2015.

Daily Market Update -January 4, 2015 (Close)

They say that the first week of the New Year determines the first month and that the first month determines the outcome for the who year.

Hopefully that’s not going to be the case.

No one really expected to wake up on the first Monday of the New Year to news than Iran and Saudi Arabia were at each other’s throats even more.

If this was 2015, we might have expected that any rise in the price of oil coming from the uncertainty associated with conflict in that region, would have resulted in the US stock market moving higher.

But late last week it seemed as if some normalcy was beginning to return to that relationship and so this morning markets aren’t going up in response.

Maybe, though, they’re just not going down as low as they might ordinarily have done, given what happened overnight in the Shanghai market.

With that market down 7% on halted trading, the contagion spread to Europe this morning.

If our own futures market had followed Germany, instead of looking at a loss of 300 points, we would be about double that amount.

Germany itself was only down about 60% of what transpired in Shanghai, so maybe it is that oil spike that’s giving us some cushion as we got set to begin the day.

That seemed to work for a while, until oil inexplicably reversed course and the market went down more and more, although it did recover significantly from its nadir.

Considering that some of our own weaknesses in 2015 were related to earlier sharp declines in Shanghai, there may be very good reason for concern as the year gets underway.

With a little bit of cash and a few positions expiring this week, I wasn’t too anxious to go and chase the market in what could have been a bargain hunter’s delight.

I thought that I would much rather sit back and see if there was any truth to the contention that the year after a flat year is typically a good year.

You wouldn’t know that by the competing contention about the role of the first week of the year and the outcome of the rest of the year.

As the day does progressed, I was prepared to part with some money if there appeared to be some stability, and I surprised myself by doing so before the stability appeared, but I wasn’t reaching to deeply down the well for that money. I think that I was still be inclined to sit back and watch.

While in 2015 there were a number of days that large early losses were reversed during the course of the day, that’s not a typical pattern and very often a period of stability is followed by a second leg lower, so I wasn’t overly interested in testing the waters too much.

I’d rather not get caught in the second leg.

That wouldn’t be the most auspicious way to begin 2016.

While it may be a difficult first day and maybe a difficult first week, my eyes are going to be focused also on a fairly large number of positions that are set to expire next week as the January 2016 cycle comes to an end.

That coincides with the start of earnings season, so there may be lots of things to be thinking about as we try to sort out the international issues.