Monthly Archives: July 2016

Daily Market Update – July 13, 2016 (7:30 AM)

This morning’s futures trading is finally suggesting that it’s time to take a rest from the strong climb that has been underway for about 10 trading sessions.

From the Brexit lows, the climb has been pretty steep, but this morning everything is at the flat line as we still have lots more to hear from members of the Federal reserve, who are on a whirlwind talking spree this week.

So far, they haven’t said much.

With 2 nice gains to start the week the July 2016 option cycle comes to its end in just 3 trading sessions.

Yesterday was one of those rare days that just about every sector was higher and some were nicely higher.

As we get closer to the end of the monthly option cycle we will have the real beginning of the earnings season to contend with.

That now starts with JP Morgan, rather than Alcoa, which has already reported.

JP Morgan may hold the key for everyone else based on how it projects the Brexit vote to impact it’s businesses in the coming years.

For its part, whether out of social consciousness or maybe great business results, JP Morgan announced a large salary increase for its lowest paid earners, up to about 60%.

Maybe that’s a prelude to what may be very good current operations, but investors are more likely to focus on future prospects, particularly how they may be impacted by the British vote.

For my part, it’s likely to be more sitting around.

I did try to rollover the Marathon Oil short call position expiring this Friday, just as I considered closing the short put position.

I’m still of the mind to keep the call position open, even if assignment is in the cards, as I wouldn’t mind creating that 1% weekly annuity and may look for some more opportunity today.

Daily Market Update – July 12, 2016 (Close)

This morning’s futures trading was telling us to expect that the all time closing and intra-day highs on the S&P 500 were safe.

That’s pretty unusual behavior not to want to test those old highs, but the predominant wave of opinion was so strongly that of finding no justification for the market to go higher that there was probably no option to do anything than to go higher.

This morning’s futures were looking to do just that, but with some degree of moderation.

That moderation gave way as the day did, as well and the S&P 500 closed at almost their highs for the day.

Ultimately, if new highs are going to be sustained it’s far more likely to happen if the path comes through moderate moves higher, rather than a breakout.

Today may not have been a breakout, but if you add the last 3 days together, we are certainly getting there.

With earnings now about to get into gear in a couple of days, despite some early earnings having started at yesterday’s close, the question will become just how much of a dampening effect might come from Brexit related guidance, especially from the financial sector.

The financial sector really kicks things off on Thursday and we get some idea.

Rarely does a weak financial sector at the time of earnings put the market into a happy place.

So there may be a battle ahead for the hearts and minds of investors.

For my part, I just want to leave the July 2016 option cycle in a few days with some assignments and some rollovers.

I’m not thinking very much in terms of what awaits, but rather what is in the here and now.

With the chance of some of those assignments and rollovers and sufficient uncovered positions, I wouldn’t mind a breakout and would certainly take any opportunity to sell calls on those uncovered positions in the belief that any breakout would be only a blip.

For that reason, I might consider longer term call options on those uncovered positions and adding some dollars to the “at cost” strike levels.

In theory, that sounds good, but first we need that breakout.

With earnings ahead and the FOMC to follow in a couple of weeks, there may be lots to give the market something to think about and maybe lots to make it move in either direction.

I just want to be ready and not flatfooted as 2017 is not too far around the corner at this point.

Daily Market Update – July 12, 2016 (Open)

This morning’s futures trading was telling us to expect that the all time closing and intra-day highs on the S&P 500 were safe.

That’s pretty unusual behavior not to want to test those old highs, but the predominant wave of opinion was so strongly that of finding no justification for the market to go higher that there was probably no option to do anything than to go higher.

This morning’s futures are looking to do just that, but with some degree of moderation.

Ultimately, if new highs are going to be sustained it’s far more likely to happen if the path comes through moderate moves higher, rather than a breakout.

With earnings now about to get into gear in a couple of days, despite some early earnings having started at yesterday’s close, the question will become just how much of a dampening effect might come from Brexit related guidance, especially from the financial sector.

The financial sector really kicks things off on Thursday and we get some idea.

Rarely does a weak financial sector at the time of earnings put the market into a happy place.

So there may be a battle ahead for the hearts and minds of investors.

For my part, I just want to leave the July 2016 option cycle in a few days with some assignments and some rollovers.

I’m not thinking very much in terms of what awaits, but rather what is in the here and now.

With the chance of some of those assignments and rollovers and sufficient uncovered positions, I wouldn’t mind a breakout and would certainly take any opportunity to sell calls on those uncovered positions in the belief that any breakout would be only a blip.

For that reason, I might consider longer term call options on those uncovered positions and adding some dollars to the “at cost” strike levels.

In theory, that sounds good, but first we need that breakout.

With earnings ahead and the FOMC to follow in a couple of weeks, there may be lots to give the market something to think about and maybe lots to make it move in either direction.

I just want to be ready and not flatfooted as 2017 is not too far around the corner at this point.

Daily Market Update – July 8, 2016 (Close)

This morning’s futures trading was telling us to expect that the all time closing and intra-day highs on the S&P 500 were about to give way to new ones.

Before that happens, though, the previous highs, representing resistance levels have to be tested. At least, that’s usually the case.

Often, the market has to make more than one run at those levels before actually breaching them and establishing a new level of support.

Following Friday’s Employment Situation Report there was enough good news in terms of job creation to give logical reason for the market to celebrate and today, at least, there didn’t even seem to be any reason to test those resistance levels.

At some point all the logical people in the world should have eventually come to the conclusion that more people getting jobs is a good thing even as it might lead to some inflation and wage inflation.

That’s especially the case as we see so much of the rest of the world getting mired in such a low rate and even negative rate environment and unable to sustain any kind of growth, at all.

There’s nothing wrong with growth, especially if its in moderation and for the moment, our economy and our stock markets are the best in the world.

This week doesn’t have too much going on, although there are 13 different speeches being given by members of the Federal reserve and some of those are likely to get a response from traders.

Those come in advance of the July 2016 FOMC meeting and on the heels of last Friday’s Employment Situation Report, you do have to wonder whether that may be the trigger to finally go ahead with the increase that we’ve all been expecting for the past few months.

I do have some cash this week and was willing to spend it as the July 2016 option cycle comes to its end.

Spending it on the same thing over and over again suits me just fine

Although I do have a number of positions set to expire this week and with some assignment or rollover prospects, I wouldn’t mind adding even some more income, especially since there are no ex-dividend positions this week.

What I didn’t expect to do was to jump in if the market shows too much strength to open the week, although individual stock weakness could be a draw.

Otherwise, earnings begin anew this week and it will be interesting to keep an eye on the financials as they could set the tone in a bad way as the lower interest rate environment hasn’t been good for them and many will start guiding lower as thoughts of the impact of the “Brexit” vote crystallize.

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Daily Market Update – July 8, 2016 (9:00 AM)

This morning’s futures trading is telling us to expect that the all time closing and intra-day highs on the S&P 500 are about to give way to new ones.

Before that happens, though, the previous highs, representing resistance levels have to be tested. At least, that’s usually the case.

Often, the market has to make more than one run at those levels before actually breaching them and establishing a new level of support.

Following Friday’s Employment Situation Report there was enough good news in terms of job creation to give logical reason for the market to celebrate.

At some point all the logical people in the world should have eventually come to the conclusion that more people getting jobs is a good thing even as it might lead to some inflation and wage inflation.

That’s especially the case as we see so much of the rest of the world getting mired in such a low rate and even negative rate environment and unable to sustain any kind of growth, at all.

There’s nothing wrong with growth, especially if its in moderation and for the moment, our economy and our stock markets are the best in the world.

This week doesn’t have too much going on, although there are 13 different speeches being given by members of the Federal reserve and some of those are likely to get a response from traders.

Those come in advance of the July 2016 FOMC meeting and on the heels of last Friday’s Employment Situation Report, you do have to wonder whether that may be the trigger to finally go ahead with the increase that we’ve all been expecting for the past few months.

I do have some cash this week and am willing to spend it as the July 2016 option cycle comes to its end.

Although I do have a number of positions set to expire this week and with some assignment or rollover prospects, I wouldn’t mind adding some more income, especially since there are no ex-dividend positions this week.

What i don’t expect to do is to jump in if the market shows too much strength to open the week, although individual stock weakness could be a draw.

Otherwise, earnings begin anew this week and it will be interesting to keep an eye on the financials as they could set the tone in a bad way as the lower interest rate environment hasn’t been good for them and many will start guiding lower as thoughts of the impact of the “Brexit” vote crystallize.

.