Daily Market Update – May 31, 2016 (Close)

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Daily Market Update – May 31, 2016 (Close)


This week it’s all about the consumer and the number of people who may be in better position to become better consumers.

By “better consumer,” no one really cares if they are more judicious in their use of money. Instead, a better consumer is one who spends more freely.

That’s what moves the economy.

Maybe that’s what the FOMC is seeing that has many believing that they will announce an interest rate hike in just a couple of weeks.

I don’t know if that will be the case. What I do know is that the FOMC seems to be playing more “head games” than ever before and seems to be floating more and more trial balloons.

We’ve not been accustomed to an FOMC that acts that way and it should be a little disconcerting.

But for now, the market likes what it believes is going on, just as it did in December, right before the FOMC raised rates.

Today, though, when it all ended, the market really didn’t know what it wanted, but it wasn’t as bad as it looked.

This week I have a little bit of money to spend, a decent number of ex-dividend positions and two stocks with call options expiring.

Those alone may be enough income for the week, but I still wouldn’t mind generating some more with the possibility of some new purchases.

In all likelihood, if doing so, I may look at an extended weekly or even monthly expiration, just to be able to get a little more premium than might be offered in a 4 day week.

With the futures pointing to a flat open, I didn’t have any great hopes of selling any calls on uncovered positions today, but that would still be something that would have made me happy, even if tying up the position with a longer time frame, as I’ve been doing now for more than 6 months.

While I think that there may be some downside ahead, regardless of what the FOMC decides in a few weeks, I have no real opinion about what the next few days or even weeks may hold.

Oil is still important, although the relationship between oil and stocks appears to be getting more and more tenuous.

Otherwise, the stronger the various consumer related measures are,as they get reported over this week and next, the more likely that the market will continue to embrace the notion of an upcoming interest rate increase.

For now, the hawks seem to be taking center stage and there has to be some belief that they see those signs of strength that mere mortals may not get to witness until the report embargoes are lifted.

I’ll be watching, but I don’t know how much acting I’ll be in a position to do as the week unfolds


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Daily Market Update – May 31, 2016

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Daily Market Update – May 31, 2016 (8:15 AM)


This week it’s all about the consumer and the number of people who may be in better position to become better consumers.

By “better consumer,” no one really cares if they are more judicious in their use of money. Instead, a better consumer is one who spends more freely.

That’s what moves the economy.

Maybe that’s what the FOMC is seeing that has many believing that they will announce an interest rate hike in just a couple of weeks.

I don’t know if that will be the case. What I do know is that the FOMC seems to be playing more “head games” than ever before and seems to be floating more and more trial balloons.

We’ve not been accustomed to an FOMC that acts that way and it should be a little disconcerting.

But for now, the market likes what it believes is going on, just as it did in December, right before the FOMC raised rates.

This week i have a little bit of money to spend, a decent number of ex-dividend positions and two stocks with call options expiring.

Those alone may be enough income for the week, but I still wouldn’t mind generating some more with the possibility of some new purchases.

In all likelihood, if doing so, I may look at an extended weekly or even monthly expiration, just to be able to get a little more premium than might be offered in a 4 day week.

With the futures pointing to a flat open, I don’t have any great hopes of selling any calls on uncovered positions today, but that would still be something that would make me happy, even if tying up the position with a longer time frame, as I’ve been doing now for more than 6 months.

While I think that there may be some downside ahead, regardless of what the FOMC decides in a few weeks, I have no real opinion about what the next few days or even weeks may hold.

Oil is still important, although the relationship between oil and stocks appears to be getting more and more tenuous.

Otherwise, the stronger the various consumer related measures are,as they get reported over this week and next, the more likely that the market will continue to embrace the notion of an upcoming interest rate increase.

For now, the hawks seem to be taking center stage and there has to be some belief that they see those signs of strength that mere mortals may not get to witness until the report embargoes are lifted.

I’ll be watching, but I don’t know how much acting I’ll be in a position to do.


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Dashboard – May 30 – June 3, 2016

 

 

 

 

 

SELECTIONS

MONDAY:   HAPPY MEMORIAL DAY

TUESDAY:   It’s all about the consumer and employment this week as the FOMC meeting nears

WEDNESDAY:  Yesterday wasn’t really as bad as it had looked as the losses were more heavily skewed to the DJIA. This morning’s futures are more evenly distributed, but still heading lower, as we await Friday’s Employment Situation report

THURSDAY:  With the Employment Situation report coming tomorrow, and inevitably going to be called the most important such report since last month’s, futures are trading flat after 2 days of recovery.

FRIDAY:.  Futures are flat as we await what could be a very consequential Employment Situation Report. Pundits are divided over whether we’re at the precipice of a breakout higher or a correction. A flat number could mean neither, for at least a couple of weeks until the FOMC meets.

 

 

 



 

                                                                                                                                           

Today's TradesCash-o-Meter

 

 

 





 “SNEAK PEEK AT NEXT WEEK” APPEARS ON FRIDAYS

Sneak PeekPie Chart Distribution

 

 

 

 

 

 

 

Weekly Summary

  

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Weekend Update – May 29, 2016

We’ve all been part of one of those really disingenuous hugs.

Whether on the giving or the receiving side, you just know that there’s nothing really good coming out of it and somehow everyone ends up feeling dirty and cheapened.

Every now and then someone on the receiving end of one of those disingenuous hugs believes it’s the real thing and they are led down the wrong path or become oblivious to what is really going on.

This week the market gave a warm embrace and hug to the notion that the FOMC might actually be announcing an interest rate hike as early as its June 2016 meeting.

The chances of that even being a possibility was slight, at the very best, just 2 or 3 weeks ago. Since then, however, there has been more and more hawkish talk coming even from the doves.

The message being sent out right now is that the FOMC is like a hammer that sees everything as a nail. In that sense, every bit of economic news justifies tapping on the brakes.

Traditionally, those brakes were there to slow down an economy that was heating up and would then lead to inflation.

Inflation was once evil, but now we recognize that there are shades of grey and maybe even Charles Manson had some good qualities.

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Week In Review – May 23 – 27, 2016

 

Option to Profit

Week in Review

 

May 23 – 27, 2016

 

NEW POSITIONS/STO NEW STO ROLLOVERS CALLS ASSIGNED/PUTS EXPIRED CALLS EXPIRED/PUTS ASSIGNED CLOSED EX-DIVIDEND
1  /  1 0 1 0   /   0 0   /   0 0 3

 

Weekly Up to Date Performance

May 23 – 16, 2016


This may have been the week that the market grew up.

That’s because they embraced the idea of higher interest rates coming as soon as in 3 weeks.

Although, if you remember what happened the last time the market grew up you might recall that embrace loosened very fast.

The market had a really spectacular week, with the S&P 500 gaining 2.3% on an unadjusted basis and 2.5% when factoring in the day in which that new position was opened.

Although the sole new purchase for the week gained 1.6%, it couldn’t keep up with the market’s performance and trailed the market by 0.7% on an unadjusted basis and 0.9% on an adjusted basis.

Existing positions, though, were only 0.7% higher, as they were the previous week. Their lack of relative performance was due to materials and precious metals having a rough week.

With no new assignments on the week those positions closed in 2016 were 8.2% higher, while the comparable performance for the S&P 500 during the same holding periods has been 1.6% higher. That represents a 418.2% difference in return on closed positions. Unfortunately, there are still very few closed positions on the year.

For the first time in a couple of weeks the market actually had a theme and it wasn’t oil.

This week the market embraced the idea that a slight increase in interest rates would be good for all involved.

With a slight upward revision in GDP and some decent earnings numbers as that season is coming to a close, there was maybe some reason to believe that the economy wasn’t so bad, after all.

Even with a more hawkish tone from Chairman Janet Yellen, markets were upbeat as the S&P 500 no stands only about 1.5% from its all time high.

Of course, that brings us back to the last time that the market embraced the idea of a rate increase coming soon.

That optimism vanished very quickly and took us into the first 6 weeks of 2016.

That wasn’t pretty.

This past week was another in a series of very quiet trading weeks.

While I am overloaded on energy, I couldn’t resist adding more shares of another in the sector, mostly to capture its dividend and the expectation that it was in a bottoming out pattern.

In fact, in the coming week, the only 2 expiring positions are both in the energy sector and I wouldn’t mind continuing to roll them over, even if they end up being in the money.

I may change my mind on that as the week progresses.

That’s because I still may be able to find a reason to add some new positions in order to generate some income and I also have 4 positions that are ex-dividend next week.

I’d be more inclined to roll an in the money positions over if I didn’t open any new positions, as I wouldn’t have quite the same need to replenish cash.

With a holiday shortened week coming up and volatility dropping, there may not be too many appealing premiums out there for a weekly contract, so I may be looking more at extended weekly options or even adding to the names that already have monthly June 2016 contracts coming up for expration.

For the next few days I won’t think about any of those things too much.

Happy and safe Memorial Day to all.

This week’s details may be seen in the Weekly Performance spreadsheet * or in the PDF file, as well as in the summary below

(Note: Duplicate mention of positions reflects different priced lots):



New Positions Opened:  Holly Frontier

Puts Closed in order to take profits:  none

Calls Rolled over, taking profits, into the next weekly cycle: Holly Frontier

Calls Rolled over, taking profits, into extended weekly cycle:  none

Calls Rolled over, taking profits, into the monthly cycle: none

Calls Rolled Over, taking profits, into a future monthly cycle:  none

Calls Rolled Up, taking net profits into same cyclenone

New STO: none

Put contracts expired: none

Put contracts rolled over: none

Long term call contracts sold:  none

Calls Assigned:none

Calls Expired:  none

Puts Assigned:  none

Stock positions Closed to take profits:  none

Stock positions Closed to take losses: none

Calls Closed to Take Profits: none

Ex-dividend Positions  HAL (5/27 $0.18), HFC (5/25 $0.33), IP (5/25 $0.44)

Ex-dividend Positions Next Week:  MOS (5/31 $0.275), ANF (6/1 $0.20), BAC (6/1 $0.05), COH (6/1 $0.34)

For the coming week the existing positions have lots that still require the sale of contracts:   AGQ, ANF, AZN, BBBY, BBY, CHK, CLF, COH, CSCO,  CY, DOW, FAST, FCX, GDX, GM, GPS, HAL, HFC, HPQ, INTC, IP, JCP, JOY, KMI, KSS, LVS, MCPIQ, MOS, NEM, RIG, WFM, WLTGQ, WY (See “Weekly Performance” spreadsheet or PDF file)



* If you don’t have a program to read or modify spreadsheets, you can download the OpenOffice Suite at no cost.



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Daily Market Update – May 27, 3016

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Daily Market Update – May 27, 2016 (8:15 AM)


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

The following trade outcomes are possible today:

Assignments:  none

Rollovers:    none

Expirations:   none

The following were ex- dividend this week:   HFC (5/25 $0.33), IP (5/25  $0.44)

The following will be ex-dividend next week:  MOS (5/31 $0.275), ANF (6/1 $0.20), BAC (6/1 $0.05), COH (6/1 $0.34)

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


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Daily Market Update – May 26, 2016 (Close)

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Daily Market Update – May 26, 2016 (Close)


After two big days of gains, the June 2016 option cycle is off to a good start and it didn’t give anything up today as some traders are getting ready to begin summer.

There’s till a long way to go until the cycle ends and I would certainly like to see the few positions that I have that do expire at that time actually get assigned, there’s one potential obstacle.

That obstacle is the FOMC Meeting announcement that occurs 2 days before the monthly expiration.

SInce many have given credit to investors coming to grips with a rate increase being announced  at that time, there could be some price to be paid if whatever does happen gets construed negatively.

Between now and then we will get plenty of economic news, although the very latest numbers suddenly seem to be the kind that would justify an increase.

That will especially be the case if this week’s GDP is stronger and we have some upward revisions, and next week’s Employment Situation Report is the same.

The latter report could really be the key if there are also some upward revisions to the recent month’s disappointing numbers.

About 6 months ago we went through this same thing and investors finally started to embrace the likelihood of a small rate increase.

That embrace was pretty fickle once the increase was announced and it took a few months for the market to get back on stride after having a 19% decline.

Whether the FOMC helped to slow down a heating up economy by a pre-emptive increase last time, or simply jumped the gun and misread the data, will be subject to interpretation. The same may be the case in just a few weeks.

This morning’s futures were flat, but that’s not too surprising after the past 2 days and the big news that could come our way tomorrow. What’s surprising, to me, at least, is that no one really seemed to be interested in taking profits before tomorrow’s GDP and then a long weekend, to boot.

With earnings not being horrible over the past week and oil holding steady, things haven’t conspired against investors even as interest rates may be going higher.

With earnings just about done and the embrace in place, we may simply be back to tracking oil prices for a while and today oil really did nothing of interest.

I just hope that the moves, whether oil or stocks higher, continues, so long as stocks follow oil in that direction, regardless of whether it makes sense or not.


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Daily Market Update – May 26, 2017

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Daily Market Update – May 26, 2016 (7:30 AM)


After two big days of gains, the June 2016 option cycle is off to a good start.

There’s till a long way to go until the cycle ends and I would certainly like to see the few positions that I have that do expire at that time actually get assigned, there’s one potential obstacle.

That obstacle is the FOMC Meeting announcement that occurs 2 days before the monthly expiration.

SInce many have given credit to investors coming to grips with a rate increase being announced  at that time, there could be some price to be paid if whatever does happen gets construed negatively.

Between now and then we will get plenty of economic news, although the very latest numbers suddenly seem to be the kind that would justify an increase.

That will especially be the case if this week’s GDP is stronger and we have some upward revisions, and next week’s Employment Situation Report is the same.

The latter report could really be the key if there are also some upward revisions to the recent month’s disappointing numbers.

About 6 months ago we went through this same thing and investors finally started to embrace the likelihood of a small rate increase.

That embrace was pretty fickle once the increase was announced and it took a few months for the market to get back on stride after having a 19% decline.

Whether the FOMC helped to slow down a heating up economy by a pre-emptive increase last time, or simply jumped the gun and misread the data, will be subject to interpretation. The same may be the case in just a few weeks.

This morning’s futures are flat, but that’s not too surprising after the past 2 days and the big news that could come our way tomorrow.

With earnings not being horrible over the past week and oil holding steady, things haven’t conspired against investors even as interest rates may be going higher.

With earnings just about done and the embrace in place, we may simply be back to tracking oil prices for a while.

I just hope that the move higher continues, regardless of whether it makes sense or not.


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Daily Market Update – May 25, 2016 (Close)

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Daily Market Update – May 25, 2016 (Cloe)


No one expected yesterdays New Home Sales surprise to the upside.

Neither did anyone expect that the New Home Sales Report would have much significance, as it has mostly been a yawner for the past few years.

In addition to some really strong numbers, with an increase of about 20% over expectations, the avarage price for a new home was significantly higher and was more in the range of the higher end home builders.

That’s either good or bad, depending on your perspective.

If you’re Bernie Sanders, it may be reflective of the skew in society, in that the increase didn’t represent first time home buyers joining in on the “American Dream,” but rather it was those already living the dream who were moving forward and leaving others further and further behind.

Others see it as good news and showing more consumer participation in the economy which will filter down to things like home furnishings, appliances and all of those other things that are part and parcel of owning a new home.

This morning the futures were cautiously higher following that large gain yesterday and there is some more good earnings news from after the close yesterday to perhaps support some of those gains.

That caution was thrown to the wind on some good EU news that may have averted another in a series of annual Greek crises. Add to the more strength in oil and accepting that higher interest rates don’t have to be bad and you gad a really good day.

I’m just happy to have actually made a trade this weekend even rolling it over in order to capture the dividend.

Going along for the ride was good, too.

With that trade done, there may not be much else to do for the rest of the week, although I’ll be on the lookout for any trading opportunities, especially if it means getting some income out of non-performing positions.

With next week being a shortened trading week there may not be too much to do then either, but at least next week has a couple of expiring positions and a decent number of ex-dividend positions that will generate some income to make it worth getting out of bed while we await what the FOMC will do and keep watching the price of oil move higher into the summer.



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Daily Market Update – May 25, 2016

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Daily Market Update – May 25, 2016 (7:30 AM)


No one expected yesterday;s New Home Sales surprise to the upside.

Neither did anyone expect that the New Home Sales Report would have much significance, as it has mostly been a yawner for the past few years.

In addition to some really strong numbers, with an increase of about 20% over expectations, the avarage price for a new home was significantly higher and was more in the range of the higher end home builders.

That’s either good or bad, depending on your perspective.

If you’re Bernie Sanders, it may be reflective of the skew in society, in that the increase didn’t represent first time home buyers joining in on the “American Dream,” but rather it was those already living the dream who were moving forward and leaving others further and further behind.

Others see it as good news and showing more consumer participation in the economy which will filter down to things like home furnishings, appliances and all of those other things that are part and parcel of owning a new home.

This morning the futures are cautiously higher following that large gain yesterday and there is some more good earnings news from after the close yesterday to perhaps support some of those gains.

I’m just happy to have actually made a trade and even rolling it over in order to capture the dividend.

With that done, there may not be much else to do for the rest of the week, although I’ll be on the lookout for any trading opportunities, especially if it means getting some income out of non-performing positions.

With next week being a shortened trading week there may not be too much to do then either, but at least next week has a couple of expiring positions and a decent number of ex-dividend positions that will generate some income to make it worth getting out of bed while we await what the FOMC will do and keep watching the price of oil move higher into the summer.



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