Daily Market Update – May 10, 2016 (7:30 AM)


Yesterday was one of those days that the market was pretty undecided about which direction to take, but to its credit it didn’t follow oil in its course reversal.

Futures had started strongly yesterday, but were eroding even as oil was doing well.

When oil strongly reversed course, the expectation might have been that stocks would have followed, but they didn’t.

This morning’s futures have both oil and stocks heading in the same direction, with the DJIA futures in triple digit gain territory.

With some preliminary retail data last week and some early earnings already reported this week, it looks as if retailers may not have much in the way of good news.

While we’ve gotten used to a year’s worth of disappointments from The Gap, hearing the same from The Limited caught just about everybody by surprise.

This week and next the major national retailers report earnings and what is likely to be key is what kind of optimism or pessimism they’re going to express for the rest of 2016.

The expectations are already low, but there isn’t likely to be any reward for trying to lengthen out the period of low expectations.

So far, this earnings season has punished companies that may have been lowered expectations, but still cast a negative tone on their guidance.

With a single new purchase yesterday, I’m still open to the possibility of more this week, but am still looking forward to seeing the end of the May 2016 option cycle and having a chance to move forward.

With so few weekly options in hand and more of them with monthly or beyond expirations, the trading has slowed down so much. For some of those positions I was just happy to get any kind of opportunity to sell a contract and I would still take some more of those opportunities while trying to wait out some precipitous declines.

With the market pointing nicely higher this morning, i would gladly give up some opportunity to add new positions in exchange for being able to sell some calls on uncovered positions, or at least get the chance to either roll over the single expiring position this week.

Those are just my own lowered expectations.