Monthly Archives: April 2016

Daily Market Update – April 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:  MRO*

Rollovers: STX puts

Expirations: none

* In the event that I can achieve a NC of $0.11 or more on a rollover of MRO, I would prefer to do that, rather than have the position assigned.

The following were ex-dividend this week:  none

The following are ex-dividend next week;  FAST (4/22 $0.30)

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

Daily Market Update – April 14, 2016 (7:30 AM)

The gains from yesterday added to the previous day were already pretty nice to look at.

They would have been even nicer if Monday hadn’t given back all of the same magnitude of gains and actually lost a little.

This week, much of the strength in stocks has come without the push from oil, although there was a boost when some rumors started regarding Saudi Arabia’s and Russia’s changing position on production cuts.

That rumor could become reality as we get ready to start next week, or they could fall by the wayside as they did in February.

For now, though, focus is on earnings.

Even as JP Morgan Chase may have lifted markets yesterday, the news wasn’t really that good.

It was just a case of announcing top and bottom lines that were better than expected, but no one expected much.

Although the numbers were better than expected, guidance wasn’t very positive.

So at least that means that JP Morgan could be setting itself up for another strong showing 3 months from now. That could really be the case if interest rates start to show some life and bad loan provisions in the oil sector don’t face continuing pressure from falling oil prices.

While we may await the news on an agreement to cut back oil production, there are lots and lots of earnings reports ahead for the next few weeks.

Although it won’t be for a while, the real key may be when retail begins to report in a few weeks.

Given yesterday’s disappointing economic news that may be more in line with the Atlanta Federal Reserve’s lowering of its GDP forecast last week, there may be reason to think that the FOMC may not be raising rates anytime soon and that the market will react in kind.

With yesterday’s gain, 2016 is no longer in the red.

The question may be whether there is another 10% move in store in one direction or another.

The past few days have been gap moves higher. Depending on how you look at things, that’s either the start of a sustained move higher or the basis for a swift drop.

You can find evidence to support both camps, but I’m hoping that some reasonable earnings news will be an impetus to move higher and maybe sustain the move, especially if retail reflects some consumer participation.

With some new calls sold yesterday, I’d love to do the same today.

Faced with a rare assignment tomorrow, I still may be interested in rolling that position over, because the premium may end up being as good as any alternative, but with far more downside protection, so be prepared for a potentially unusual trade.

Those kinds of trades were very common when volatility was high across the market.

When volatility is high for an individual stock, the same concept can apply, so why not?

Daily Market Update – April 13, 2016 (Close)

This morning’s early futures trading, before JP Morgan Chase released its earnings report to really get the season underway was still nicely higher.

The DJIA futures were flirting with another triple digit gain following yesterday’s 170+ point move.

This morning, the futures were higher even as oil futures were a little bit lower.

Yesterday stocks followed oil higher on the report that both Saudi Arabia and Russia were going to agree to oil production cutbacks at the end of the week.

That rumor first started more than a month ago and was more than rumor.

It was true, until Iran messed up everyone’s strategy by not agreeing to go along with the shared burden of reducing production in an attempt to drive prices higher.

That shouldn’t have come as too much of a surprise to anyone, but it was.

Instead, when rational thought finally set in, the strong gains gave way to strong losses.

We’ll see how the intent this time around will work out, but so far this morning and then throughout the entire day, the market was accepting it on face value and adding on to gains,  The gains for the week could end up being considerable if oil continues its climb higher in anticipation of a real agreement.

Today, the market certainly added to the gains, even as oil wasn’t a participant.

Yesterday’s gain came after the market gave up the entirety of a similar sized gain, and this morning’s early trading gave some sign that maybe it was representing some real pent up buying fever.

With low expectations JP Morgan Chase reported earnings this morning and set the tone for the rest of the day. The market gapped higher and never threatened to erase the early gain.

Despite JP Morgan giving less than a rosy outlook for what awaits, it still beat lowered expectations and for today, that was all that mattered.

Generally, if the financial sector does poorly, so too does the rest of the market.

If the financials do well, the market doesn’t necessarily follow along, but at this still early stage of economic expansion, good news for big banks should be good news for most everyone.

I don’t know which direction the market may take, but I hope that it does continue higher, just not in these kind of leaps and bounds.

At a time when we may be returning to an era when 10% moves are not uncommon, these large daily moves make it easier to see those large cumulative moves.

We’ve already had 3 of those in the past 6 months and more could be in store.

I’m still open to the idea of adding positions, but now would likely be looking at the following week for expiration.

Otherwise, it would just be nice to make a trade or two. Fortunately, one did get made today, providing a little bit of coverage to an existing positions.

We need more of those and maybe then some more places to put cash reserves, but i may want to wait until we see what Saudi Arabia and Russia really decide to do.

Daily Market Update – April 13, 2016 (7:30 AM)

This morning’s early futures trading, before JP Morgan Chase releases its earnings report to really get the season underway is still nicely higher.

The DJIA futures were flirting with another triple digit gain following yesterday’s 170+ point move.

This morning, the futures are higher even as oil futures are a little bit lower.

Yesterday stocks followed oil higher on the report that both Saudi Arabia and Russia were going to agree to oil production cutbacks at the end of the week.

That rumor first started more than a month ago and was more than rumor.

It was true, until Iran messed up everyone’s strategy by not agreeing to go along with the shared burden of reducing production in an attempt to drive prices higher.

That shouldn’t have come as too much of a surprise to anyone, but it was.

Instead, when rational thought finally set in, the strong gains gave way to strong losses.

We’ll see how the intent this time around will work out, but so far this morning, the market is accepting it on face value and adding on to gains,  The gains for the week could end up being considerable if oil continues its climb higher in anticipation of a real agreement.

Yesterday’s gain came after the market gave up the entirety of a similar sized gain and this morning’s early trading could be representing some real pent up buying fever.

With low expectation, JP Morgan Chase reports earnings and could set the tone.

Generally, if the financial sector does poorly, so too does the rest of the market.

If the financials do well, the market doesn’t necessarily follow along, but at this still early stage of economic expansion, good news for big banks should be good news for most everyone.

I don’t know which direction the market may take, but I hope that it does continue higher, just not in these kind of leaps and bounds.

At a time when we may be returning to an era when 10% moves are not uncommon, these large daily moves make it easier to see those large cumulative moves.

We’ve already had 3 of those in the past 6 months and more could be in store.

I’m still open to the idea of adding positions, but now would likely be looking at the following week for expiration.

Otherwise, it would just be nice to make a trade or two

Daily Market Update – April 12, 2016 (Close)

You probably shouldn’t even try to explain yesterday and even though there was an explanation for today, I’ll believe it when I see it.

As far as yesterday goes, there’s usually a reason for a gap move higher or lower, but yesterday’s higher open didn’t really have too much behind it.

So it may have been a little understandable why the move higher couldn’t be sustained.

But then came the rebound that restored much of what was lost.

That may have been hard to explain, as well.

That rebound didn’t get quite as high as the original gap move, so maybe some technicians may have soured at that point.

Maybe that explains the final leg lower to end the day seeing the market take a small loss.

Who knows.

This morning the futures were headed mildly higher as we awaited tomorrow’s big first earnings test.

That test is the beginning of financial season. Alcoa doesn’t really count anymore. Now it’s JP Morgan Chase that sets the season off to the races and expectations are really low.

I didn’t expect too much action yesterday, but it was an active day, just not for me.

It was safer just sitting and watching, while looking for any opportunity to manage existing positions.

I thought today would be more of the same.

What happened, was what has  been just about the only reliable catalyst for all of 2016 kicking in.

It was another large move higher by oil and the market followed, never really considering giving the gain a second thought.

What made me give it a second thought, while I did enjoyed seeing my shares move higher, was the news that the oil move was based upon.

It was the same news from about a month ago when there was a report that there would be a cut in oil production agreed to by OPEC and non-OPEC members.

Oil and stocks soared on that news, until someone realized that Iran wasn’t in agreement, just as they were ramping up to really start bringing product to market.

When the realization hit, oil and stocks reversed course.

Today, the rumor was that Saudi Arabia and Russia will agree to large cutbacks this coming Sunday.

As I said, I’ll believe it when I see it and I would expect Iran to announce it’s rushing in to fill any void left by those 2 big players, as if everyone else won’t be cheating, as well.

So today’s gain was really nice, but nothing would be better than some better than expected earnings reports starting tomorrow morning.