Daily Market Update – August 24, 2016 (Close)
As we approach the middle of the week, all eyes are now on the final 2 days of festivities coming from the beauty of Jackson Hole.
I’ve been there twice, coincidentally at this time of the year, but long before I had any interest in the Kansas City Federal Reserve’s party antics.
The likelihood is that Janet Yellen will say something that supports the notion that an interest rate hike is going to soon be obviously warranted.
The market will probably react positively to those kind of words, but then comes the questions as to what’s next.
What has to come next, in order for the market to move higher is that there is obvious evidence of the consumer again becoming involved in growing the economy.
At the same time there can’t be too much acceleration in the price of oil, while the dollar has to remain in its current range or get a little weaker.
Of course, it also wouldn’t hurt if the interest rate increase was small and that there wasn’t going to be much talk about another increase in the near future.
With all the good things possibly needing to happen to keep stocks moving higher, one thing that isn’t going to be need is competition from bonds.
I don’t think that there will be much to do for me this week as the single expiring position has already been rolled over, although some of the positions that I’ve been hoping to sell calls upon are looking more likely, so I would be very happy to pull that trigger.
That’s so even if it means putting them into suspended animation for a few months, as the low volatility doesn’t offer much in the way of premiums unless time is added into the equation in a meaningful way.
If in that process there’s also a dividend or two to be had and maybe some capital gains on the shares, as well, it is a little more palatable stretching things out.
Otherwise, not so much.
What surprised me today, as oil and the markets continued their recent re-discovery of one another, was the opportunity to rollover positions in the Gold Miners ETF following the big fall in gold.
Those positions have been great performers and consistent revenue creators, so I don’t mind seeing the big falls as they make this into a really long term holding that has generated lots of revenue and now will do so for at least one additional month.