Monthly Archives: February 2016

Daily Market Update – February 18, 2016 (Close)

After yesterday’s gain, which came on top of Friday’s 300+ points and Tuesday’s 200+ points, February 2016 has gone from having started last week as even worse than January 2016 to actually being in the black.

That’s quite an achievement.

The real test is how the market handles such gaps higher.

798 points on the DJIA in just 3 trading sessions is pretty good by all measures.

What it has done is to bring the DJIA to some near term resistance.

While the S&P 500 is also at a near term resistance level, it does have another minor resistance level about 12 points higher.

After that, if you believe in charts, it’s do or die, as the next resistance level for both indexes is much higher.

On the DJIA it’s about 1200 points higher and for the S&P 500 it’s about 150 points higher.

What would be good would be to see the gains coming in smaller sizes and taking a day off every now and then to digest those gains.

But that would be the rational thing to do.

And today the market did the rational thing.

Although I had hoped that the gains would keep going for at least the final 2 days of the week.

Although it does look like there will finally be an assignment, the first in 2016, I’d love the idea of actually also being able to roll anything within the small number of expiring positions. Even going out a few months would be nice and also a nice change of pace.

Unfortunately,with the market taking the day off today, it wasn’t the time to find those opportunities popping up.

The futures were mildly higher this morning, with again, no real news to account for anything, although Asian markets were again nicely higher.

As the day progressed the market gave up its gains as oil led the way also giving up its gains.

The story seems to still be one of oil, but more and more the lessened possibility of increasing interest rates seems to be having a calming effect on traders.

At some point and I thought that point would have been here at least a quarter ago, there has to be some evidence that earnings are getting better in organic terms.

At some point there has to be a real reason for the market to go higher and not just on paradoxical reactions to bad news or from stock buybacks.

That would be nice, but I’ve waited a long time for the past to return.

In the stock market it usually does, but usually much more quickly than this macro-cycle has been doing.

For now, I’m still patient. Who knows, even oil may make some kind of a meaningful comeback.

Stranger things have happened.

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Daily Market Update – February 18, 2016 (7:30 AM)

After yesterday’s gain, which came on top of Friday’s 300+ points and Tuesday’s 200+ points, February 2016 has gone from having started last week as even worse than January 2016 to actually being in the black.

That’s quite an achievement.

The real test is how the market handles such gaps higher.

798 points on the DJIA in just 3 trading sessions is pretty good by all measures.

What it has done is to bring the DJIA to some near term resistance.

While the S&P 500 is also at a near term resistance level, it does have another minor resistance level about 12 points higher.

After that, if you believe in charts, it’s do or die, as the next resistance level for both indexes is much higher.

On the DJIA it’s about 1200 points higher and for the S&P 500 it’s about 150 points higher.

What would be good would be to see the gains coming in smaller sizes and taking a day off every now and then to digest those gains.

But that would be the rational thing to do.

I just hope that the gains keep going at least for the next 2 days.

Although it does look like there will finally be an assignment, the first in 2016, I’d love the idea of actually also being able to roll anything within the small number of expiring positions. Even going out a few months would be nice and also a nice change of pace.

The futures are mildly higher this morning, with again, no real news to account for anything, although Asian markets are again nicely higher.

The story seems to still be one of oil, but more and more the lessened possibility of increasing interest rates seems to be having a calming effect on traders.

At some point and I thought that point would have been here at least a quarter ago, there has to be some evidence that earnings are getting better in organic terms.

At some point there has to be a real reason for the market to go higher and not just on paradoxical reactions to bad news or from stock buybacks.

That would be nice, but I’ve waited a long time for the past to return.

In the stock market it usually does, but usually much more quickly than this macro-cycle has been doing.

For now, I’m still patient. Who knows, even oil may make some kind of a meaningful comeback.

Stranger things have happened.

.

.

Daily Market Update – February 17, 2016 (Close)

What was good about yesterday was much more than the fact that the market climbed more than 200 points.

What was also good was that the climb higher was also a broad one, but even that wasn’t what was really good about yesterday.

What was really good was that the market, which may have been buoyed by early reports of an OPEC agreement to cut oil production, didn’t fall apart when the realization came that the agreement was complete rubbish.

Instead of following oil much lower when traders began to come to their senses that a production cut was going to be impossible, the market briefly reduced some of its gains, but never made an assault on the flat line.

Instead, it went higher and higher and finished the day nicely.

The bad part is that if the market realizes that its estrangement from oil price is a good thing, it may start to act properly if oil does start a sustained move higher.

At some point oil will have to do that and at some point the market will have to react in kind.

Today wasn’t going to be that day, though.

The problem still ahead becomes whether or not the market will come to that realization too soon and be unable to recoup its losses as it foolishly followed oil lower.

As with many things, we’ll see.

This morning, the futures were again pointing higher, even though there was really nothing very different about the world this morning.

In a rear view mirror the past days do look pretty good, but it’s hard to see whether there is anything up ahead that can convince the market that it’s time to approach the December 2015 recovery highs or maybe even beyond.

What today did bring, maybe thanks to oil’s strength, or maybe to the release of the FOMC minutes which gave some sense that there was a chance that 2016 might just not be a year of a series of interest rate increases, but rather maybe only a single such increase, was another 250+ point gain.

As is usually the case, it’s easy to get taken in when you see some of those strong moves higher as was the case yesterday and last Friday and now again today. However, 2016 has been filled with days like those and they only led to disappointment.

This time may be different, but for now, I’d be happy just to get a trade or two in for the week or maybe just an assignment.

For now, those aren’t overly lofty aspirations, but it would be nice to finally see 2016 get on track.

Maybe today, was that day, as February 2016 is now in the black.

Unbelievable.

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Daily Market Update – February 17, 2016 (7:30 AM)

What was good about yesterday was much more than the fact that the market climbed more than 200 points.

What was also good was that the climb higher was also a broad one, but even that wasn’t what was really good about yesterday.

What was really good was that the market, which may have been buoyed by early reports of an OPEC agreement to cut oil production, didn’t fall apart when the realization came that the agreement was complete rubbish.

Instead of following oil much lower when traders began to come to their senses that a production cut was going to be impossible, the market briefly reduced some of its gains, but never made an assault on the flat line.

Instead, it went higher and higher and finished the day nicely.

The bad part is that if the market realizes that its estrangement from oil price is a good thing, it may start to act properly if oil does start a sustained move higher.

At some point oil will have to do that and at some point the market will have to react in kind.

The problem becomes whether or not the market will come to that realization too soon and be unable to recoup its losses as it foolishly followed oil lower.

As with many things, we’ll see.

This morning, the futures are again pointing higher, even though there is really nothing very different about the world this morning.

In a rear view mirror the past days do look pretty good, but it’s hard to see whether there is anything up ahead that can convince the market that it’s time to approach the December 2015 recovery highs or maybe even beyond.

As is usually the case, it’s easy to get taken in when you see some of those syrong moves higher as was the case yesterday and last Friday. However, 2016 has been filled with days like those and they only led to disappointment.

This time may be different, but for now, I’d be happy just to get a trade or two in for the week or maybe just an assignment.

For now, those aren’t overly lofty aspirations, but it would be nice to finally see 2016 get on track.

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Daily Market Update – February 16, 2016 (Close)

Well, maybe it was a good thing to have had a day off yesterday to honor those dead Presidents who are very unlikely to find themselves replacing a non-President on the $10 bill.

While we were celebrating Presidents Day, the Nikkei and Shanghai indexes were having a real party and today we joined them, despite some party poopers trying to put a damper on things.

The Nikkei rose a wild 7% over the weekend, although that came after having lost a near amount earlier in the week.

Our own futures were up strongly yesterday while awaiting the real thing this morning.

Instead of bursting the bubble of a rally that wanted to exist, this morning also came word that OPEC has agreed on an oil production freeze and that sent those futures higher, as well.

As goes oil, so has gone the US stock market, although there should be a big caveat with that OPEC agreement.

It was done without Iran and Venezuela in attendance and the OPEC agreement calls for all members to abide.

So, it may not be very likely that there will actually be a reduction in production, particularly as Iran has already announced that it would be happy to abide by the resolution for a freeze.

Oh, one thing that came along with that agreement was a further caveat that they would do so once they got back to their own pre-embargo levels of production.

So that increase in the oil futures was overly optimistic if it’s actually predicated on some kind of cooperative spirit coming out of OPEC.

It took the oil futures market a few hours to come to that realization, but this time, the stock market didn’t follow oil lower once reality hit.

What in the world were oil traders thinking?

Last Friday’s stock market close and another strong day today come along at a good time.

While I have some positions set to expire this week, most aren’t going to be candidates for rollover, following an extended downward move by the market that is still far from getting back to normal.

If, however, any of those stocks of mine facing expiration this week do show some marked strength, there may be reason to continue to consider some longer term option sales, as I’ve been doing for a few months, including with some of those positions expiring this week.

Otherwise, my one new position opened last week did come as a surprise, considering how quiet 2016 has been in that regard.

I don’t know if it will be joined by any other new purchases this week, as I would much rather go along for a ride higher with the market and maybe get some opportunity to sell calls on uncovered positions as has been the case the past two weeks.

There isn’t too much economic news this week, although there are a number of Federal Reserve Governors scheduled to give speeches, so there may be some knee jerk reactions to the interpretations given to the words that will be used during the course of the week.

For his part, Neel Kashkari, the newest Federal Reserve Governor, made a splash with his very first speech today suggesting that a big overhaul of Wall Street was likely.

If the past is any indication, those interpretations will go back and forth as one Governor is construed as having said something dovish, while the next was a hawk. From the looks of today’s market it didn’t appear as if anyone paid any attention to the new Minneapolis Federal reserve Governor.

So as has been the case for 2016, I’ll probably sit and watch and hope for an occasional opportunity to do something to make some income this week.