Monthly Archives: July 2016

Daily Market Update – July 27, 2016 (Close)

Yesterday was one of those days that optimists could point at and say that as the market was hovering around its all time highs, and was able to again close well off from its intra-day lows, shows consolidation and strength.

That could be the case, as Monday was the same, despite ending up with a loss.

That was also the case as the market was reacting to the actual “Brexit” voting.

For me it was just another in a long series of 2016 days without any trading, but with those complaints tempered by a look at the bottom line which has a number of positions clawing back from their disappointing behavior in 2015.

As the record high level of the markets gets increasingly precarious, even as a base may slowly be forming, there is also increasing desire to either want to exit some positions, even if ROIs may not be anything to brag about, or at least secure some additional ROI by selling calls, collecting dividends and waiting out some actual profit on the underlying shares.

For too many positions that has been a frustratingly low proposition. The moves higher in individual positions that are still underwater are greeted by a mix of greed and hope on my part.

In those cases, even being able to close out some of those positions at a breakeven would secure a very good 2016, but still wouldn’t necessarily create an environment of more trading opportunities.

At these levels there may be more energy in positions that haven’t kept up the pace but may become attractive to others looking for the rare undiscovered gems among other positions thought to be too pricey.

Did I mention hope?

Additionally, with a portfolio still overweight energy positions, the recent decline in oil prices hasn’t taken a toll on the bottom line.

As analysts are calling for about another 10% decline in the price of oil after having already had a 10% drop in just a couple of weeks, I look at it as portending a move higher, sooner rather than later.

That’s pretty much how things work out.

Usually the siren calls come right before the inflection.

If that’s the case, I expect continued outperformance.

So I was happy to sit and await today’s FOMC Statement release and then Friday’s GDP.

The bad news is that the market, although recovering from a brief sell off after the announcement actually declined quite a bit in the final 30 minutes to end the day unchanged and people scratching their heads about where the theme resided today.

There was none, if you were also wondering.

The good news is that I did find an opportunity to sell calls on another uncovered position before it, like so many other stocks today reversed course and took opportunity along with it.

With only a handful of positions set to expire this week and 2 of them energy positions, I hope that some stability returns this week and along with it some more trading, too. 

But at this point, I’m pleased with having had some ex-dividend positions and a couple of new call sales and still some hopes of either rollovers or assignments within the next 2 days.

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Daily Market Update – July 27, 2016 (7:30 AM)

Yesterday was one of those days that optimists could point at and say that as the market was hovering around its all time highs, and was able to again close well off from its intra-day lows, shows consolidation and strength.

That could be the case, as Monday was the same, despite ending up with a loss.

That was also the case as the market was reacting to the actual “Brexit” voting.

For me it was just another in a long series of 2016 days without any trading, but with those complaints tempered by a look at the bottom line which has a number of positions clawing back from their disappointing behavior in 2015.

As the record high level of the markets gets increasingly precarious, even as a base may slowly be forming, there is also increasing desire to either want to exit some positions, even if ROIs may not be anything to brag about, or at least secure some additional ROI by selling calls, collecting dividends and waiting out some actual profit on the underlying shares.

For too many positions that has been a frustratingly low proposition. The moves higher in individual positions that are still underwater are greeted by a mix of greed and hope on my part.

In those cases, even being able to close out some of those positions at a breakeven would secure a very good 2016, but still wouldn’t necessarily create an environment of more trading opportunities.

At these levels there may be more energy in positions that haven’t kept up the pace but may become attractive to others looking for the rare undiscovered gems among other positions thought to be too pricey.

Did I mention hope?

Additionally, with a portfolio still overweight energy positions, the recent decline in oil prices hasn’t taken a toll on the bottom line.

As analysts are calling for about another 10% decline in the price of oil after having already had a 10% drop in just a couple of weeks, I look at it as portending a move higher, sooner rather than later.

That’s pretty much how things work out.

Usually the siren calls come right before the inflection.

If that’s the case, I expect continued outperformance.

So I’m happy to sit and await today’s FOMC Statement release and Friday’s GDP.

With only a handful of positions set to expire this week and 2 of them energy positions, I hope that some stability returns this week and along with it some trading, too.

.

Daily Market Update – July 26, 2016 (Close)

Since the day or two after the Brexit vote, there have been very few attempts at a triple digit loss, much less an actual triple digit loss.

Yesterday was an attempt at one, but the market, just as it did during those Brexit lows, finished the day well off from its lows.

For optimists, that’s always a good sign and it definitely worked out that way more than a month ago, the last time there were any cumulative declines. Every day in the string of declines ended up well off from the intra-day lows.

This morning, there didn’t seem to be any follow through brewing, but then again, not much of anything was brewing as markets were flat.

The impetus may again be coming from oil, which was weak yesterday and was weak again today as oil was now well below its near term high and comfortably below the $50 level.

As it would turn out, and maybe it was coincidence, much like the near daily coincidences we saw for about the first 6 months of the year, but as oil turned around today and headed higher, the market did, as well.

And so, today, just like yesterday, the close well well off from its lows.

Again, a good sign, especially with some earnings news that hit after the closing bell that could have some carry through tomorrow.

As we await tomorrow’s FOMC Statement release and Friday’s GDP, even as earnings are now pouring in, oil may be returning as the principal story leading the market higher or lower.

I didn’t part with any cash yesterday and was willing to do so today if there were some further price declines, but they weren’t really there or large enough.

I’d have been happy for a repeat of Monday and would have taken any opportunity to sell some calls on uncovered positions, even if tying them up for a few months would be welcome.

After having some of those positions sitting and wallowing for months without generating any premiums, what’s another few months?

Slowly, the number of uncovered positions is being whittled down, but there are still far too many.

It will likely take some continued market moves higher and sustained ones. at that, to see the majority of those positions become performing ones, but I always remain as optimistic as those who look at the day’s trading action at the market’s close.

So my expectation was for another quiet day on the personal level as it looked as there was little reason for the market to be anything but busy today and there just wasn’t much reason for trading swings to pick up as the week progresses, unless the FOMC pulls a surprise or the GDP stuns.

Even Apple’s nice jump in the after hours may be nice, but not really the sort of thing to pull the market higher.

At this point, I think an FOMC surprise would send markets lower and a GDP surprise to the upside would send markets higher.

But, that would mean that there’s some role for logic and logic tells us that’s rarely the case.

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

Since the day or two after the Brexit vote, there have been very few attempts at a triple digit loss, much less an actual triple digit loss.

Yesterday was an attempt at one, but the market, just as it did during those Brexit lows, finished the day well off from its lows.

For optimists, that’s always a good sign and it definitely worked out that way more than a month ago, the last time there were any cumulative declines. Every day in the string of declines ended up well off from the intra-day lows.

This morning, there doesn’t seem to be any follow through brewing, but then again, not much of anything is brewing as markets are flat.

The impetus may again be coming from oil, which was weak yesterday and is weak again today as oil is now well below its near term high and comfortably below the $50 level.

As we await tomorrow’s FOMC Statement release and Friday’s GDP, even as earnings are now pouring in, oil may be returning as the principal story leading the market higher or lower.

I didn’t part with any cash yesterday and would be more willing to do so today if there were some further price declines, but if not, I’d be more than happy to be able to do as was the case yesterday.

Any opportunity to sell some calls on uncovered positions, even if tying them up for a few months would be welcome.

After having some of those positions sitting and wallowing for months without generating any premiums, what’s another few months?

Slowly, the number of uncovered positions is being whittled down, but there are still far too many.

It will likely take some continued market moves higher and sustained ones. at that, to see the majority of those positions become performing ones, but I always remain as optimistic as those who look at the day’s trading action at the market’s close.

So my expectation is for another quiet day on the personal level as it looks as there is little reason for the market to be anything but busy today and there may not be much reason for trading swings to pick up as the week progresses, unless the FOMC pulls a surprise or the GDP stuns.

At this point, I think an FOMC surprise would send markets lower and a GDP surprise to the upside would send markets higher.

But, that would mean that there’s some role for logic and logic tells us that’s rarely the case.

Daily Market Update – July 25, 2016 (Close)

Ordinarily, any week with both an FOMC Statement release and the release of the latest GDP data could be expected to be a game changer.

No one is expecting that this week and neither am I, but that could be a mistake.

The FOMC, when it last raised interest rates in December 2016 didn’t exactly have the most overt data on its side. At the moment, the data isn’t great, but it may be heading in a more positive direction than last time.

The FOMC has made it clear that a rate hike need not be tied to a scheduled monthly meeting and August is an off month.

That raises the possibility that there could be a rate hike this month or any time between Wednesday and the regularly scheduled meeting in September.

A hike now would take lots by surprise and would likely not be viewed in a positive way, at least in the short term.

With lots of itchy trigger fingers as the market is sitting at all time highs, there could be lots of reason to sell and take profits.

That’s especially true if you think about the facts.

One fact that may be germane is that in all of its history, the market had only gone on to add 2% or more to an all time closing high on 3 occasions.

You might want to do some quick math to see where we currently sit.

I sit with only 3 expiring positions this week and two of those are in the same position, but on opposite sides of the coin.

One short call and one short put and with earnings in that position being reported next week.

While I wouldn’t mind spending some money this week to supplement the 3 ex-dividend positions, I think that I’d like to see an assignment of the short call and an expiration of the short put.

If not, then the next tactic is to roll those over, likely beyond the next week, but being mindful of an upcoming ex-dividend date, as well.

The futures weren’t doing very much this morning and as much as I might want to supplement the week’s income, I was reluctant to stick my neck out too far, still sitting at such lofty levels.

I expected to be a passive watcher as the morning got underway and to weigh the options, but I also expected to become a buyer on any downside movement.

Instead, even as the market was hitting triple digit losses, I couldn’t see anything worth the risk, but was very happily pleased by the opportunity to sell some calls on an uncovered position, even though having to use November calls.

We’ll see what tomorrow brings.

Maybe there will be a reason to part with some cash, but for now, I’ fine with just watching and treading water.