Weekend Update – September 25, 2016

The Talking Heads were really something.

I saw them and The Ramones in Cambridge.

Not at a concert, but at an album signing.

I picked up an album just to be able to get a close look at the members of both bands, mostly because one of the Ramones had a safety pin through his cheek and I thought that was pretty weirdly cool.

Then I promptly put the signed albums back into the rack.

Maybe it’s strange that so many years later one of the Ramones, maybe the one with the safety pin, would sing an homage to American capitalism and maybe a bit of an homage to one of its media symbols, “The Money Honey.”

But that was all almost 40 years ago and I never dreamed that those two groups would have been so influential. I never would have returned the signed albums back to the rack had I any clue that they would have been worth something some day.

In time, I came to especially like the Talking Heads, but never got as close as I did that one afternoon, instead having to settle on repeatedly melting the cassette tapes holding their songs.

“Burning Down the House,” “Once in a Lifetime” and so many more.

This coming week, right on the heels of the FOMC’s most recent statement release that kept investors in a celebratory mood, is going to be something of a Talking Feds festival.

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Week In Review – September 19 – 23, 2016

 

Option to Profit

Week in Review


September 19 – 23, 2016

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

 

Weekly Up to Date Performance

September 19 – 23, 2016

This week was another in a series that have given a loud and clear message.

If you had any doubt, what is clearly the message is that investors will make believe that they are accepting of increased interest rates, but only if it happens sometime in the future and not today or tomorrow.

That’s what they got and so investors were happy, even as there were some profits to be taken on Friday to end the week.

There was one new position opened this week and it was one designed to tie up money for the full duration of the October 2016 monthly option cycle.

That position was up 3.6% for the week, while the adjusted and unadjusted S&P 500 were both 1.2% higher.

Existing positions continued to feel the decrease in energy prices.

There were no newly closed positions for the week.

It was another interesting week, this time with traders going out on a limb before the FOMC Statement release and betting that no rate increase would be announced and further betting that there wouldn’t be any new hawkish sentiment.

This wasn’t the kind of week that I was excited about getting out in front of, but there was one trade that i couldn’t resist letting pass by.

In hindsight, there should have been others, as well.

For the most part, though, it was a really quiet week, even as the market showed some significant optimism, despite ending the week on a moderately broad, but very orderly sell-off.

What will really be interesting will be next week is that there will be 12 public speeches by members of the Federal Reserve, including Janet Yellen.

If anyone is loo
king for clarity, next week is probably not the place for it, but the final word will go to Janet Yellen, who also happens to be the final of the talking Feds to talk next week.

If recent events are any indicator, you may see markets move up and move down with each spin set forward, as it is also clear that there hasn’t been this much dissent on the Federal Reserve ever since transparency became the norm.

I do have 2 expiring positions next week and two ex-dividend positions, in addition to some cash to spend.

With the potential for some rollovers or even an assignment and expiration of a short put contract, I may not have the real need to open any new positions.

I didn’t have the need this past week, either, but it can be hard to look the other way.

At the moment, my preference would be to cash out the chips set to expire and add to cash reserves, but what I’ve found out over the years is that no one cares about those preferences.

It helps to have a Plan B.

Next week does have some meaningful economic data being reported, but we’ll have to wait until Friday to get the GDP.

Coming the morning after Yellen’s presentation, if she has much of a hawkish tone and the GDP comes in stronger than expected, especially with some upward revisions, I think we can expect a sell-off.

Even if rates aren’t raised until December, as that month draws more near, traders are likely to show the same revulsion at the idea of an interest rate increase then, as they do now.

It never gets old.

Oh wait.

It does.

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:  BMY

Puts Closed in order to take profits:  none

Calls Rolled over, taking profits, into the next weekly cycle:   none

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: GME (Nov 2016)

Put contracts expired: none

Put contracts rolled over: none

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   LVS (9/20 $0.72)

Ex-dividend Positions Next Week:  CY (9/27 $0.11), DOW (9/28 $0.46)

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 – September 23, 2016

 

 

Daily Market Update – September 23, 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: none

Expirations:   none

The following were ex-dividend this week:    LVS (9/20 $0.72)

The following are ex-dividend next week:  CY (9/27 $0.11), DOW (9/28 $0.46)

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

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Daily Market Update – September 22, 2016 (Close)

 

 

Daily Market Update – September 22, 2016 (Close)


The market moved about 160 points higher yesterday as the FOMC announced that there wouldn’t be an interest rate increase.

At least right now.

The market, did as it had done other times, it seemed to accept the fact that there wouild be an interest rate ahead, as the FOMC hinted very strongly that there was room and time for such a hike still in 2016.

Actually, it didn’t do any of that until Chairman Yellen’s press conference.

Up until that point traders were trying to figure out what to do and actually reversed their initial knee jerk reaction which had returned the market to its opening highs and took it to its intra-day lows.

The Chairman’s words were the ones that soothed, as the market went higher as she recited her prepared text and then continued during the question and answer period and continued right until the closing bell.

Investors also got some good news from the Bank of Japan, which basically admitted that a negative interest rate environment had not been working.

For some here in the United States, there was still a fear that negative interest rates could have become the Federal Reserve’s next weapon.

So the market celebrated and there may be as many as 3 more months ahead, but it has been clear that whenever the market believes that there might be a chance of an interest rate increase in the near term, it doesn’t like the idea.

With the FOMC strongly suggesting that there was still time for an interest rate increase in 2016, we’ll see what happens as we draw near.

While most interpret that to mean December, there is nothing sacred to prevent an increase from being implemented before then.

That would likely get investors upset, even if the underlying economy was in good enough health to support that increase.

In the meantime all eyes will be focused on whatever economic reports might justify that increase.

Best of all, however, would be some cheery guidance coming from companies as earnings season starts all over again in about 3 weeks.

I suspect that there will be little for me to do for the rest of this week, with no expiring positions to think about.

Maybe another residual rally tomorrow, just as we had today, may give some opportunity for call sales on uncovered positions, but as has been the case for much of 2016, I’m happy just going for the ride and catching any opportunity that might come along.

.

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Daily Market Update – September 22, 2016

 

 

Daily Market Update – September 22, 2016 (7:30 AM)


The market moved about 160 points higher yesterday as the FOMC announced that there wouldn’t be an interest rate increase.

At least right now.

The market, did as it had done other times, it seemed to accept the fact that there wouild be an interest rate ahead, as the FOMC hinted very strongly that there was room and time for such a hike still in 2016.

Actually, it didn’t do any of that until Chairman Yellen’s press conference.

Up until that point traders were trying to figure out what to do and actually reversed their initial knee jerk reaction which had returned the market to its opening highs and took it to its intra-day lows.

The Chairman’s words were the ones that soothed, as the market went higher as she recited her prepared text and then continued during the question and answer period and continued right until the closing bell.

Investors also got some good news from the Bank of Japan, which basically admitted that a negative interest rate environment had not been working.

For some here in the United States, there was still a fear that negative interest rates could have become the Federal Reserve’s next weapon.

So the market celebrated and there may be as many as 3 more months ahead, but it has been clear that whenever the market believes that there might be a chance of an interest rate increase in the near term, it doesn’t like the idea.

With the FOMC strongly suggesting that there was still time for an interest rate increase in 2016, we’ll see what happens as we draw near.

While most interpret that to mean December, there is nothing sacred to prevent an increase from being implemented before then.

That would likely get investors upset, even if the underlying economy was in good enough health to support that increase.

In the meantime all eyes will be focused on whatever economic reports might justify that increase.

Best of all, however, would be some cheery guidance coming from companies as earnings season starts all over again in about 3 weeks.

I suspect that there will be little for me to do for the rest of this week, with no expiring positions to think about.

Maybe any residual rally today or tomorrow may give some opportunity for call sales on uncovered positions, but as has been the case for much of 2016, I’m happy just going for the ride and catching any opportunity that might come along.

.

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