Monthly Archives: February 2016

Daily Market Update – February 11, 2016 (Close)

The market initially thought that it got Janet Yellen to say what it is that they wanted to hear.

Market investors are now convinced that further interest rate increases have to be off the table for 2016.

The initial reaction to Janet Yellen’s suggestion on Wednesday that such rate increases would be deferred was enthusiastically accepted, until realizing that even a March rate increase wasn’t really off the table.

That lead to a large turnaround in the DJIA, but the broader S&P 500 didn’t end the day faring as badly as the DJIA had done.

This morning, though, as the futures were preparing us for the opening bell, you had your choice of culprits to blame for the large losses looming.

You could point at Janet Yellen, who still had a chance to mollify her comments as she continued her Congressional testimony today.

Or you could blame the meltdown in European banks and the very idea that negative interest rates could be a possibility in more than just Japan.

Of course, there was also that issue of further steep declines in oil this morning and gold soaring past important resistance levels after a couple of years of doldrums.

So you could take your pick.

This was again, then, a day that started out as being very likely to be a day of sitting and watching the various tantrums play themselves out and then seeing who, if anyone, is left standing by the closing bell.

The answer was that no one was really left standing, although yet again the market found a way to bounce fairly higher from its big losses to finally end the day with only a big loss and not a much bigger loss.

So that’s good. Right?

For one, I’m just glad to have gotten some trades in early in the week, although it will remain to be seen whether finally adding a new position yesterday after a prolonged buying boycott was a good idea.

Like lots of other people, I was watching the gyrations as Janet Yellen’s session with Congress was televised and wondering why there is so much uncertainty among those who are supposed to know what they’re doing.

Today didn’t deliver that answer.

I don’t think tomorrow will, either.

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Daily Market Update – February 11, 2016 (7:30 AM)

The market initially thought that it got Janet Yellen to say what it is that they wanted to hear.

Market investors are now convinced that further interest rate increases have to be off the table for 2016.

The initial reaction to Janet Yellen’s suggestion that such rate increases would be deferred was enthusiastically accepted, until realizing that even a March rate increase wasn’t really off the table.

That lead to a large turnaround in the DJIA, but the broader S&P 500 didn’t end the day faring as badly as the DJIA had done.

This morning, though, as the futures are preparing us for the opening bell, you have your choice of culprits to blame for the large losses looming.

You could point at Janet Yellen, who still has a chance to mollify her comments as she continues her Congressional testimony today.

Or you could blame the meltdown in European banks and the very idea that negative interest rates could be a possibility in more than just Japan.

Of course, there’s also that issue of further steep declines in oil this morning and gold soaring past important resistance levels after a couple of years of doldrums.

So take your pick.

This will again, then, likely be a day of sitting and watching the various tantrums play themselves out and then seeing who, if anyone, is left standing by the closing bell.

For one, I’m just glad to have gotten some trades in early in the week, although it will remain to be seen whether finally adding a new position yesterday after a prolonged buying boycott was a good idea.

Like lots of other people, I’ll be watching the gyrations as Janet Yellen’s session with Congress is televised and wondering why there is so much uncertainty among those who are supposed to know what they’re doing.

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Daily Market Update – February 10, 2016 (Close)

Yesterday was another of those days that we’ve seen in 2016 where there was some strength heading into the closing that eliminated all or much of a large loss.

Most of the time, though, in 2016, that hasn’t translated itself into sustained gains. In fact, most of the time it hasn’t even translated itself into gains the next day.

Today looked as if it might end up differently, though, as the futures were trading up by triple digits as a nation turned its lonely eyes to Janet Yellen, who was to give her mandated Congressional testimony today.

She hadn’t been heard from since the FOMC raised interest rates and a lot has happened since then, including questioning whether or not there really is data to have supported that initial rate hike.

The real question was whether the dovish Yellen would re-appear this morning.

The general belief was that the re-emergence of a dovish tone would likely send stocks much higher.

The answer to that burning question was basically “yes and no.”

She basically said that the FOMC was likely to delay any rate hikes in 2016, but not abandon the possibility..

The more hawkish Yellen hasn’t helped things even as her co-Chair, Stanley Fisher has been sounding more dulcet tones.

The dovish Yellen got the DJIA up by nearly 200 points, but when the reality sunk in the day close at its low, although just shy of another triple digit day.

Still, it was in the wrong direction and the S&P 500, which had already been 1.4% in the hole finished lower, but wasn’t weighed down anywhere near as much as the DJIA, which had to contend with the burden of earnings reports.

The real surprise was that while I definitely wasn’t expecting to do much on a personal trading level and would have been ecstatic at any opportunity that could arise during the course of the day, I was thinking about new call sales.

I never thought that I might finally part with some cash and add a new position, but it happened.

Finally.

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Daily Market Update – February 10, 2016 (9:00 AM)

Yesterday was another of those days that we’ve seen in 2016 where there was some strength heading into the closing that eliminated all or much of a large loss.

Most of the time, though, in 2016, that hasn’t translated itself into sustained gains. In fact, most of the time it hasn’t even translated itself into gains the next day.

Today may be different though as the futures were trading up by triple digits as a nation turned its lonely eyes to Janet Yellen, who was to give her mandated Congressional testimony today.

She hasn’t been heard from since the FOMC raised interest rates and a lot has happened since then, including questioning whether or not there really is data to have supported that initial rate hike.

The real question is whether the dovish Yellen will re-appear this morning.

That would likely send stocks much higher if she does show up with that persona.

The more hawkish Yellen hasn’t helped things even as her co-Chair, Stanley Fisher has been sounding more dulcet tones.

So we’ll see what today may yet bring as the S&P 500 is already 1.4% in the hole to begin the week.

I’m not expecting to do much on a personal trading level, but would be ecstatic at any opportunity that could arise during the course of the day.

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Daily Market Update – February 9, 2016 (7:30 AM)

Among the recurring themes in  2016, in addition to the ones that have already been beaten to death, is the refrain that the loss wasn’t as big as it could have been.

I’ve said that many times already in 2016 and have looked at those mid-day or late day recoveries as being harbingers of some stability or even some advances to come.

Yesterday was one of those days as the DJIA was down nearly 400 points, but ended the day down only 177.

Only.

Without exception, those false recoveries have been just that.

They certainly haven’t been a harbinger of anything good to come and they have, instead served to falsify give a sense of something good ahead.

I generally like to purchase stocks when the market is in a downswing.

For most of the past 7 years those downswings have been very brief.

The typical scenario was a lower open to start the week and then a flourish to end the week nicely higher.

That went on and on for a long time.

These latest large drops haven’t seen the recovery flourishes and I haven’t had much reason to have the slightest bit of confidence about buying “on the dip,” because these haven’t been your typical dips.

A dip usually means a quick recovery ensues, but that hasn’t been the case and as a result, it hasn’t been a good idea to get sucked in by what appear to be good prices, as those prices have only gone lower and lower.

For a while much of the weakness was being obscured by the strong performance of a handful of stocks, but now, those too are beginning to give back a significant portion of their recent gains.

Yesterday I was very happy to have been able to sell some calls on some uncovered positions, as had also been the case last week.

With no rollover opportunities in either of these weeks, the sales on uncovered positions helps, as do the ex-dividend positions, especially with this week having 4 such positions.

Still, as yesterday’s late day recovery doesn’t offer much in the way of  confidence, the morning starts with some conflicting data.

The oil theme isn’t appearing to go according to script, as oil futures are up sharply and the stock futures are flat in early trading.

Additionally, the Nikkei lost 5.4% overnight and its bonds traded below 0% for the first time ever.

I still can’t get my head around 0% interest rates.

So fart, our own markets aren’t taking any direction from either of those inputs.

Tomorrow’s Congressional appearance byJjanet Yellen may be more of the catalyst for something, but it’s hard to know the tone or tenor she’ll take and it’s also hard to know whether investors will respond at face value or invert the words to create a paradoxical response.

Again, I don’t expect to be doing much today or probably not for the rest of the week, as we get ready for next week, which marks the expiration of the February 2016 contracts.

Still, I’d jump at any opportunity to repeat yesterday or the call sales of the previous week.

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