Daily Market Update – July 25, 2016

 

 

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


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 2 expiring positions this week and both 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 aren’t doing very much this morning and as much as I might want to supplement the week’s income, I’m reluctant to stick my neck out too far, still sitting at such lofty levels.

I will likely again be a passive watcher as the morning gets underway and weigh the options.

I’d prefer to miss out on some further gains than to get sucked in at this point.

T

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Dashboard – July 25 – 29, 2016

 

 

 

 

 

SELECTIONS

MONDAY:   The week looks as if it might get off to a quiet start as an FOMC Statement release is ahead, as is the GDP. No one expects much from either, but that could lead to a summer surprise

TUESDAY:   A rare down day yesterday, although off from its lows, looks as if it will be followed by a day opening flat, as the FOMC convenes and investors have no expectations for policy alteration.

WEDNESDAY:  The FOMC Statement is released this afternoon as the week thus far is one looking for direction, even as earnings have been better than expected and haven’t been painting a negative picture for months ahead.

THURSDAY:  Another flat day may await as we also await tomorrow’s GDP. At the same time, investors are betting that it’s less than even money that we even get a single rate hike in 2016 at this point, although there’s lots of data to come and Friday could be the start of an upward pointing stream

FRIDAY:.  For now, the futures are looking as if it will be another flat day, but the GDP still awaits, so anything may yet happen

 

 

 



 

                                                                                                                                           

Today's TradesCash-o-Meter

 

 

 





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Weekly Summary

  

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Weekend Update – July 24, 2016

“When you’re a hammer, everything looks like a nail.”

That old saying has some truth to it.

Maybe a lot of truth.

When you think about stocks all day long everything seems to be some sort of an indicator as I look for a rational explanation to what is often a prelude to an irrational outcome.

Reducing the intricate character of what is found in nature to a mathematical sequence is both uplifting and deflating.

When the very thought of uplifting and deflating conjures up an image of a stock chart it may be time to re-evaluate things.

When you start seeing the beauty in nature as a series of peaks and troughs and start thinking about Fibonacci Retracements, it is definitely time to step back.

Sometimes stepping back is the healthy thing to do, but as the market has been climbing it’s most recent mountain that has repeatedly taken the S&P 500 to new closing highs, it hasn’t taken very many breaks in its ascent.

You don’t have to be a technician, nor a mountain climber to know that every now and then you have to regroup and re-energize.

You also don’t have to be a mountain climber to know that standing on the edge of a cliff is fraught with danger, just as each step higher adds to risk, unless there’s a place to rest.

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Daily Market Update – July 22, 2016

 

Option to Profit

Week in Review

 

July 18 – 22, 2016

 

NEW POSITIONS/STO NEW STO ROLLOVERS CALLS ASSIGNED/PUTS EXPIRED CALLS EXPIRED/PUTS ASSIGNED CLOSED EX-DIVIDEND
0  /  1 0 2 0   /   0 0  /   0 0 1

 

Weekly Up to Date Performance

July 18 – 22, 2016


Records, records and more records.

That’s how last week ended and so did this week.

In the post-Brexit world this was just another in a series of good weeks.

Once again, there was only one position opened this week and it was also once again a familiar one.

That’s also exactly what I said last week, but that’s actually the ideal way a covered option strategy would work and it has been a long time since really being able to serially execute trades in any positions, so it does feel more rewarding than has been the case of late.

That position ended the week 0.6% higher, but could do no better than both the adjusted and unadjusted S&P 500.

The S&P 500, itself, rose another 0.6%.

Maybe not as impressive as previous week, but still enough to make people happy, especially the people that matter most.

Me.

Existing positions bested the S&P 500 by an additional 0.3%, in what was really a good week.

With  no  new closed positions on the week closed positions in 2016 are still 6.8% higher, while the comparable performance for the S&P 500 during the same holding periods has been 1.9% higher. That represents a 267% difference in return on closed positions. As with every week in 2016, I’d be much more impressed if there were far more of those closed positions to point toward. With such few closed positions for the year, the differential could just as easily have been in the other direction and of a similar magnitude, yet also signifying little.

This was another good week in what continues to be a good year, despite very little additional trading this week.

It’s always nice to see asset values rise some more, but I still prefer to have some activity accompany the gains.

Once again, this week had only 1 new position opened and only two rollovers. Unfortunately, despite having some feelers out there, I couldn’t find any buyers for uncovered positions to supplement the scant dividend income for the week..

With only a single ex-dividend positions this week, I would have liked to have had more income generating opportunities, but all in all, I was pleased.

With only one new purchase this week and still having cash from assignments the previous week, I do have some discretionary cash to put to work.

However, we’re still at all time highs and I’m not eager to put too much at risk in the chase.

With 2 positions expiring next week and 3 ex-dividend positions, there may already be sufficient opportunity for income generation to tread lightly, but I’ll still keep an open mind as the FOMC sets the stage for the coming week.

While that does take place on Wednesday, the real event to get some notice may turn out to be Friday’s GDP report.

A strong GDP may give some reason to believe that the FOMC will make an interest rate increase announcement as early as August, even though there is no meeting scheduled and no press conference.

That would catch some off guard and might be construed as more than just mildly inflationary.

But that’s attempting to be logical and logic hasn’t had much of a home for a year or more.

Lots more.



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:  MRO (puts)

Puts Closed in order to take profits:  none

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

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: MRO

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   FAST (7/22 $0.30)

Ex-dividend Positions Next Week: F (7/27 $0.15), MS (7/28 $0.20), KMI (7/29 $0.125)

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 – July 22, 2016

 

 

Daily Market Update – July 22, 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:   none

Rollovers:   MRO puts

Expiration:   none

The following were ex-dividend this week:   FAST (7/22 $0.30)

The following are ex-dividend next week:   F (7/26 $0.15), MS (7/27 $0.20), KMI (7/28 $0.125).

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

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