Daily Market Update – August 31, 2016 (Close)

 

 

Daily Market Update – August 31, 2016 (Close)


Yesterday was a return to the recent kind of normal we had come to expect.

Stocks traded in a very narrow range all through the day as most eyes were now looking toward Friday morning.

That’s when the Employment Situation report is released and we may get a better idea of when the FOMC may be increasing interest rates.

The Boston and Chicago Federal Reserve Presidents spoke in China yesterday and both seemed to believe that an interest rate hike was near, but they had very differing views of the economy.

The Chicago Federal Reserve President said that he believed there was evidence of the US economy slowing down, but that there would be an interest rate hike, anyway.

The Boston Federal Reserve Federal Reserve President believed that the economy was strengthening and meeting the FOMC’s targets.

So, the question is whether its September or December.

What is forgotten is that a number of months ago the FOMC said that it wasn’t tied by any particular scheduled meeting to make such an announcement.

Still, the next question is how the market would react to September, December or anything in between.

Friday may give some clue.

With a new position opened yesterday, I didn’t expect to be doing very much else for the rest of the week, so today wasn’t a disappointment in that regard.

It was a disappointment, though, in not being able to capitalize on the sale of any calls on uncovered positions, as I still had my eyes on a few possibilities, but today’s weakness didn’t help.

Today was weak, but for no real reason other than oil continued weak and that there is still that big overhang on Friday.

With no expiring positions it continues to be a good time to be on the beach or relaxing somewhere until summer is officially over and maybe the market finds some reason to respond to something and kick up its volatility just a little.

For now, it’s hard to imagine how it could ever get any lower, but there hasn’t been very much to excite markets or traders.

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Daily Market Update – August 31, 2016

 

 

Daily Market Update – August 31, 2016 (7:30 AM)


Yesterday was a return to the recent kind of normal we had come to expect.

Stocks traded in a very narrow range all through the day as most eyes are now looking toward Friday morning.

That’s when the Employment Situation report is released and we may get a better idea of when the FOMC may be increasing interest rates.

The Boston and Chicago Federal Reserve Presidents spoke in China yesterday and both seemed to believe that an interest rate hike was near, but they had very differing views of the economy.

The Chicago Federal Reserve President said that he believed there was evidence of the US economy slowing down, but that there would be an interest rate hike, anyway.

The Boston Federal Reserve Federal Reserve President believed that the economy was strengthening and meeting the FOMC’s targets.

So, the question is whether its September or December.

What is forgotten is that a number of months ago the FOMC said that it wasn’t tied by any particular scheduled meeting to make such an announcement.

Still, the next question is how the market would react to September, December or anything in between.

Friday may give some clue.

With a new position opened yesterday, I don’t expect to be doing very much else for the rest of the week.

With no expiring positions it continues to be a good time to be on the beach or relaxing somewhere until summer is officially over and maybe the market finds some reason to respond to something and kick up its volatility just a little.

For now, it’s hard to imagine how it could ever get any lower, but there hasn’t been very much to excite markets or traders.

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Daily Market Update – August 30, 2016 (Close)

 

 

Daily Market Update – August 30, 2016 (Close)


Yesterday was a nice surprise.

I don’t really understand its basis, as the conventional wisdom was that positive consumer economic news was of the kind that didn’t give reason to suspect that interest rates would go higher in September.

While that was happening, what did make sense was that oil had a sharp decline, stocks went higher.

That hasn’t really been the case all through 2016, but yesterday made sense, while 2016 hasn’t.

This morning there appeared to be no follow through to yesterday’s strength and you would expect that to continue being the case, at least until Friday morning.

That’s when the Employment Situation Report is released and a really strong number could mean an interest rate increase as early as September.

At the moment, it feels as if that were to be the case, the market might react negatively, as it appears that most everyone has emotionally accepted a December increase, but not any sooner.

For my part, I think that if there are strong numbers on Friday, traders will quickly get over any disappointment and go on toward a strong buying spree.

Then, heading into the end of the year, it will either be disappointment that the economy wasn’t strong enough to support a second rate hike or disappointment that it did.

So, I would love to see a little disappointment now and the rebound after, just to have a chance to lighten up on some positions and move into more cash as the year comes to its end.

2016 has been a good year and I wouldn’t mind freezing it in time by securing some of the profits, while still trying to milk as many option premiums and dividends out from the portfolio.

Today was a day mostly spent frozen in time as the market moved very little in a narrow range.

Still, there was an opportunity to spend some money as investors punished again on an earnings miss.

Hopefully, time will heal that wound and by then I can have the premium, the dividend and some capital gains to go along with all of those other ex-dividend positions this week.

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Daily Market Update – August 30, 2016

 

 

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


Yesterday was a nice surprise.

I don’t really understand its basis, as the conventional wisdom was that positive consumer economic news was of the kind that didn’t give reason to suspect that interest rates would go higher in September.

While that was happening, what did make sense was that oil had a sharp decline, stocks went higher.

That hasn’t really been the case all through 2016, but yesterday made sense, while 2016 hasn’t.

This morning there appears to be no follow through to yesterday’s strength and you would expect that to continue being the case, at least until Friday morning.

That’s when the Employment Situation Report is released and a really strong number could mean an interest rate increase as early as September.

At the moment, it feels as if that were to be the case, the market might react negatively, as it appears that most everyone has emotionally accepted a December increase, but not any sooner.

For my part, I think that if there are strong numbers on Friday, traders will quickly get over any disappointment and go on toward a strong buying spree.

Then, heading into the end of the year, it will either be disappointment that the economy wasn’t strong enough to support a second rate hike or disappointment that it did.

So, I would love to see a little disappointment now and the rebound after, just to have a chance to lighten up on some positions and move into more cash as the year comes to its end.

2016 has been a good year and I wouldn’t mind freezing it in time by securing some of the profits, while still trying to milk as many option premiums and dividends out from the portfolio.

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Daily Market Update – August 29, 2016 (Close)

 

 

Daily Market Update – August 29, 2016 (Close)


It;s the final week of summer and the confusion about interest rates has now been all cleared up.

That is to say that there should be no confusion about the continuing confusion over the timing of those rate increases and their number during the remainder of 2016.

So that leaves this week’s Employment Situation Report and not much else

That is, unless oil and stocks re-establish their strange relationship, which they seem to have done over the past week or two.

That didn’t seem to be the case this morning as the futures were evolving, but this is likely to be a very quiet week on volume traded and some things may get exaggerated on the light volume.

But as the day started out it became clear that oil and stocks would go their own ways, as oil went lower.

The confusion, however, continued, as there was an indication of increasing consumer participation, but that was interpreted as not leading to an earlier interest rate hike than a single one in December.

In other words, good news was good news, but not for any logical reason.

With a little bit of cash to spend, I wouldn’t mind opening some new positions for the week, but would really love to have a repeat of last week.

Last week there were 2 rollovers and the sale of calls on two uncovered positions, in addition to having opened  a new position.

What was missing last week were any ex-dividend positions.

This week already has 4 ex-dividend positions so there is already some income accounted for, but it would be nice to add to those and especially to put more of those uncovered positions to work.

Last week’s single new position came on the last day of trading for the week, which is something that I don’t often do.

This week there is some considerable uncertainty with Friday’s data release, but I would probably execute any new position trades prior to then, especially if there’s a dividend capture in the equation, as well.

Otherwise, it may be a return to the quiet weeks that have been the hallmark of this summer.

This may, again, just be a good week to hang out at the beach.


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