Monthly Archives: August 2016

Daily Market Update – August 17, 2016 (7:30 AM)

The futures are again pointing to a flat open this morning.

That’s something that we should be getting used to, perhaps being a sign that the market is getting jittery about what is coming next.

The biggest reason to be worried is that maybe nothing is coming next.

If the economy continues as it has been going and there is no real evidence of the kind of growth that would justify even the smallest of interest rate increases, it’s going to be pretty hard to keep interest in buying sustained.

After hearing 2 of the federal Reserve’s Presidents speak yesterday, ahead of today’s FOMC meeting minutes release, you would think that they’re seeing some kind of data or pattern that would justify a rate increase, but the market is getting far too many mixed signals.

Still, even with yesterday’s minor decline, it continues to be record high after record high.

We are even now at the point that this is only the 4th time in history that the market has gone up more than another 2% after surpassing its previous record closing high.

So this isn’t necessarily a unique period in time, but it is a pretty rare one.

At some point traders will wake up.

What we don’t know is whether they wake up to a realization that nothing has been warranted on the basis of fundamentals or whether they realized that as old as this bull market may now be, we’re still at the beginning.

It’s hard to believe that the latter will be the case, but as long as it’s surprises that you’re going to dismiss, you may as well dismiss everything that has already gotten us to where we are and whose reality has been validated.

As we come upon mid-week and the FOMC minutes are released, we may have reason for the market to wander from its flatness of the morning.

There are also some more earnings reports due and there may yet be reason for a market reaction, although yesterday’s news from Home Depot was met with a very muted response.

My expectations for any action today are small, but there are a couple of potential trades to open short call positions on currently uncovered positions.

That alone would give me a reason to think that this week was worthwhile.

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Daily Market Update – August 16, 2016 (Close)

The futures were pointing to a flat open this morning as the market finished yesterday off from its highs, but still managing to post all time closing highs once again in all three major indexes.

That grind higher has been continual ever since we got over the “Brexit” vote and learned to move the market higher even in the absence of news.

With retailer reports still coming in this week, the morning started with DJIA component Home Depot reaffirming guidance.

Based on the way the market received last week’s retail news in which retailers surged higher on basically flat earnings and downgraded guidance, you would think that there would be a push to go much higher this morning, at least in that one stock.

But that wasn’t the case today.

Not only for the market, but neither for Home Depot itself.

Maybe everyone always expects too much from them and have settled on lowered expectations for most everyone else.

It will be interesting to see how Wal-Mart is greeted this week as it has had lowered expectations for a while at this point.

In the meantime, with tomorrow being the release of the FOMC minutes it’s hard to know where the real push to go higher will come from easy as those who bet on those sort of things pushed up the likelihood of a September increase today and did so by 100%.

Now, the expected chance of such an increase is at 18%, following some words today from Federal reserve Presidents Dudley and Lockhart.

Other than the past 2 months Employment Statistics Reports, there really hasn’t been much news to validate the idea that the economy is expanding at a rate that might warrant the FOMC getting ready to roll out another rate hike, but at least one voting member expressed an opinion that one is likely.

For those that had good reason to expect multiple such rate increases in 2016, we are now facing the final 4 months of the year without having had a single one.

At the current record levels it’s hard to see anything other than disappointment as any kind of news comes in, given how the market has mostly been paradoxical in its responses over the past few years.

The only logical response at this point would be to drop that contrarian response to economic news and see the good as good and the bad, as bad.

I don’t know if that will start to happen this week.

After yesterday’s gain, but no real opportunity to do anything constructive, I don’t really know what the rest of the week will bring, other than having to watch two expiring positions.

I suppose I could do that from the beach.

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Daily Market Update – August 16, 2016 (7:30 AM)

The futures are pointing to a flat open this morning as the market finished yesterday off from its highs, but still managing to post all time closing highs once again in all three major indexes.

That grind higher has been continual ever since we got over the “Brexit” vote and learned to move the market higher even in the absence of news.

With retailer reports still coming in this week, the morning started with DJIA component Home Depot reaffirming guidance.

Based on the way the market received last week’s retail news in which retailers surged higher on basically flat earnings and downgraded guidance, you would think that there would be a push to go much higher this morning, at least in that one stock.

But so far that isn’t the case.

With tomorrow being the release of the FOMC minutes it’s hard to know where the real push to go higher will come from.

Other than the past 2 months Employment Statistics Reports, there really hasn’t been much news to validate the idea that the economy is expanding at a rate that might warrant the FOMC getting ready to roll out another rate hike.

For those that had good reason to expect multiple such rate increases in 2016, we are now facing the final 4 months of the year without having had a single one.

At the current record levels it’s hard to see anything other than disappointment as any kind of news comes in, given how the market has mostly been paradoxical in its responses over the past few years.

The only logical response at this point would be to drop that contrarian response to economic news and see the good as good and the bad, as bad.

I don’t know if that will start to happen this week.

After yesterday’s gain, but no real opportunity to do anything constructive, I don’t really know what the rest of the week will bring, other than having to watch two expiring positions.

I suppose I could do that from the beach.

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Daily Market Update – August 15, 2016 (Close)

Last week saw us hitting highs on all 3 major indexes, yet finishing basically unchanged on the week.

This week we could be facing a big push from earnings from national retailers once again.

Last week it was a strong push higher, but this week we really may be at an inflection point.

If the news is good, there may be reason to push the market even higher as there becomes a sense that perhaps the FOMC will act soon to raise interest rates.

If the numbers or the guidances are weak, then it’s really anyone’s guess.

My guess is that it would be hard to justify a market doing anything but going lower.

But if I was being judged on just today, that guess would have been pretty off base, as all 3 major indexes again hit new all time closing highs, as oil led the way, but retail was again strong.

For the coming week, coinciding with the end of the monthly cycle, there are 2 expiring positions and 2 ex-dividend positions.

While I do have money to spend, I really don’t see where the real attraction is going to come from, although there may be reason to consider the very small handful of choices this week.

I imagine that I’ll be doing a lot of watching this week.

The market looked as if it is going to open fairly flat, but you never do know what surprises there may be.

The only surprise today was more rebound strength in oil, but that was more than enough.

Last Thursday, for example, was a nice surprise higher, but it’s hard to imagine that this week’s retail earnings numbers will really continue to surprise.

That’s especially so when you consider that there really wasn’t anything very good to report last week.

Hopefully, that will change this week and we find a real reason to see the market take off.

In either direction.

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Daily Market Update – August 15, 2016 (7:30 AM)

Last week saw us hitting highs on all 3 major indexes, yet finishing basically unchanged on the week.

This week we could be facing a big push from earnings from national retailers once again.

Last week it was a strong push higher, but this week we really may be at an inflection point.

If the news is good, there may be reason to push the market even higher as there becomes a sense that perhaps the FOMC will act soon to raise interest rates.

If the numbers or the guidances are weak, then it’s really anyone’s guess.

My guess is that it would be hard to justify a market doing anything but going lower.

For the coming week, coinciding with the end of the monthly cycle, there are 2 expiring positions and 2 ex-dividend positions.

While I do have money to spend, I really don’t see where the real attraction is going to come from, although there may be reason to consider the very small handful of choices this week.

I imagine that I’ll be doing a lot of watching this week.

The market looks as if it is going to open fairly flat, but you never do know what surprises there may be.

Last Thursday, for example, was a nice surprise higher, but it’s hard to imagine that this week’s retail earnings numbers will really continue to surprise.

That’s especially so when you consider that there really wasn’t anything very good to report last week.

Hopefully, that will change this week and we find a real reason to see the market take off.

In either direction.

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