Daily Market Update – June 1, 2016 (Close)
Yesterday looked like it was a week day, but it really wasn’t that bad.
Today it looked like it might get bad, but it didn’t.
With an eye on Volatility this week, as a possible trading vehicle ahead of the FOMC announcement in a couple of weeks, you would have seen the story being told yesterday, but not so much today.
The VIX is usually higher as the market goes lower, but even as the DJIA closed down nearly 90 points yesterday, the VIX ended the day lower.
That’s because the S&P 500 was only very slightly lower and the NASDAQ was higher.
The market actually performed reasonably well yesterday, other than for a handful of DJIA stocks.
It showed in the VIX.
There wasn’t much else really going on yesterday and it seemed as if it might just be more of the same today as the futures were unfolding, but then it started turning negative.
Then it did turn out to be more of the same as the market actually climbed back about the same amount that it did the prior day.
This morning’s futures were lower, but not by very much, as we waited for some potentially important news on Friday as the Employment Situation Report is released.
A strong number, indicating lots of new jobs being created and a decrease in the unemployment rate, could mean another test for traders.
We would find out whether traders are still at ease with the idea of an interest rate increase, or whether they breathe a collective sigh if the numbers aren’t that great.
Logic would tell you that the market should really embrace anything that seems to be reflective of an improving economy.
Given where markets stand, it is pretty amazing just how high they are without the real strong push from the economy. Those rising oil prices may not be from an improving world wide economic picture, so it’s a little puzzling why the stock market continues to embrace those higher prices.
It has been a long time, but we’re either still waiting for a real rebound or we have to get used to the idea that there may be a new paradigm at hand, or maybe the real coming of the old paradigm that never happened.
We may have just been experiencing lots of mini-soft landings over the many months since 2009, as we’ve gently nudged higher and higher and the economy has gently become better and better.
We’re not used to that sort of thing, usually expecting extremes and extreme actions in response.
This week I’m not likely to have much action myself, other than perhaps to roll over a position or 2 or to see a position or two get assigned.
At this point, I’d be happy to roll them over, even if faced with assignment, as has been the case for the past month or so.
The rollovers seem like much easier money than hunting for a new position when looking for a place to park cash coming from assignments.
Maybe that’s being lazy, but I would rather rest in a pile of income than in a pile of cash being put at risk.